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Reagan In Retrospect

ISSUE:  Summer 2001

Virtually from the day Ronald Reagan entered politics, aides who worked for him, officials who met with him, and journalists who followed him around were startled by his blunders. He became governor of California, Lou Cannon wrote, without a clue as to “how budgets were written, how bills were passed, or who it was in state government who checked the background of prospective appointees.” Robert Dallek reported an immortal scene of Reagan taking the helm. Asked by reporters what his legislative program was, the Gipper after a moment of awkward silence responded, “I could use some coaching from the sidelines, if anyone can recall my legislative program.”

Under this self-proclaimed foe of “big government” and “immoral spending,” California endured what was then the highest tax raise in the history of any state. The annual budget jumped from $4.6 billion to $10.2 billion, including a 50 percent rise in the operations part over which in theory he had the greatest control. Meanwhile he treated the public to bombast and fantasy. Our universities have run amok, he warned. They are “subsidizing intellectual curiosity.” He kicked off his campaign for re-election as governor with a sensational question. “Would you believe that 15.1 percent of the population of California is on welfare?” The actual figure at the time was a third of that.

From there things went down hill. He ran for president.

For a brief period he amused Washington insiders. Around the time of his first inauguration Clark Clifford told the guests at a Georgetown dinner party that their new president was “an amiable dunce.” It eventually became necessary to withdraw the amiable part. Reagan did the waving and saluting and ceremonial greetings to perfection, and he worked an old Jack Dempsey line—”Honey, I forgot to duck”—to good effect after he was shot. In front of an audience he excelled in expressing grave concern, moral indignation, relaxed good humor, confidence in the future, or whatever the script called for. With the possible exception of Benjamin Harrison, however, he was the coldest man ever to occupy the White House, polite to those around him but fundamentally indifferent to them. After 20 years of close contact, his assistant Michael Deaver stated that he “had seen Reagan shed tears in public on numerous occasions but never once in private.” In a recent television documentary Reagan’s son Ron said that his father had no close friends—”none.” The dunce part more or less held but ceased to amuse.

David Stockman, Reagan’s first budget director, politically naïve but a whiz with numbers, found that his boss was shaky on the concept of cause and effect, let alone sums and quotients, and the distinction between constant dollars and current dollars was out of the question altogether. Stockman tried hard. Anxious at one point to forestall the $185 billion deficit he saw looming in the near future, he divided the entire federal outflow into about 50 categories, explained the problem, and gave the president himself the choice of what cuts to make. Reagan labored off and on for days before returning the marked-up papers, whereupon Stockman calculated that the “solution” presented to him would result in an $800 billion deficit over the next five years. A photograph taken in the Oval Office about that time and reprinted in Haynes Johnson’s book Sleepwalking through History says it all. Donald Regan, then secretary of the treasury, points to a huge deficit projection on a blown-up bar graph. Reagan, sitting statesmanlike at his desk, looks in the wrong direction. Stockman leaked, resigned, wrote The Triumph of Politics, and went to work on Wall Street.

Unfortunately, the government and the country could not resign. Their finances were in the hands of a man whose idea of practical would be to throw the board at the darts. Federal receipts fell while federal spending increased on average 3.7 percent annually in constant dollars over what it would have been at the highest level set by Jimmy Carter. The mastermind who swore to “shrink government” pumped up the national debt to $2.6 trillion, and the trade deficit quadrupled. As Lou Cannon observed, Reagan’s own friend George F. Will, a conservative, “calculated that the middle six budgets of the administration had produced deficits totaling $1.1 trillion and that Reagan proposed thirteen-fourteenths of that total. Congress had added a relatively insignificant $90 billion. . . .” Unemployment reached a new high after three years of Reagan. By the time he finished urging America to “stand tall,” the value of the dollar had declined, and foreign lenders were funding a substantial portion of U.S. government operations. In the case of Reagan’s beloved “de-regulation,” the savings and loan debacle he left behind used up the entire potential peace dividend resulting from the collapse of the Soviet Union.

No program was too important to bungle or too small to muff. Although executive-branch intelligence expenditures rose by 200 percent, Reagan never knew that the Soviets were not competing with his military budget. At the time Nancy Reagan’s “Just Say No to Drugs” campaign was launched, her husband’s administration had cut the Customs Service budget so severely that only 2 percent of shipments entering the United States could be inspected. According to journalists Jane Mayer and Doyle McManus, the president’s televised appeal for a liver donor for a baby in Texas coincided with his staff’s push to eliminate funds for a national computer network to match organ donors with patients in need of transplants.

Reagan’s performance as commander-in-chief was absurd and terrifying. In 1983 he flabbergasted a delegation of congressmen by asserting that U. S. submarines did not carry nuclear missiles. When 241 Marines were blown up in a barracks in Beirut, Senator Ernest Hollings pointed out Reagan’s folly in sending them. “If they were put there to fight, there are too few. If they were put there to die, there are too many.” Premier Gorbachev, briefed by his scientists as to why Reagan’s Star Wars missile defense would not work, was astonished that Reagan, whose scientists and military strategists had reached the same conclusion, really believed in it. Determined to work around the American’s stupidity and end the Cold War, Gorbachev at a 1987 summit meeting said, “I think you’re wasting your money. But if that’s what you want to do, go ahead.” Reagan proclaimed SDI “a cornerstone of our security strategy for the 1990’s and beyond,” but it took the Senate to find a practical use for it. They prohibited the testing of SDI components without their prior approval and converted the fantasy into pork. As the late Lars-Erik Nelson wrote recently, “After an expenditure of more than $60 billion, none of its variations has ever passed a realistic operational test.” Reagan risked impeachment for selling weapons to Iran and lost face among millions of people who had not suspected him of lying. The return for running the risk and for more than 2000 TOW missiles was this: three hostages released and three more Americans promptly kidnapped to replace them.

Then there was Reagan, the master of geopolitics. Upon returning from a tour of Latin America in 1982 he informed reporters he had “learned a lot. And you’d be surprised, yes, because, you know, they’re all individual countries.” At a 22-nation conference on economic development Reagan’s paean to free-enterprise farming exasperated the others to the point where President Nyerere of Tanzania interrupted: “Let me tell you something. U.S. agriculture is the most heavily subsidized in the world.” After the 1984 election Bud McFarlane, head of the National Security Council, compiled a list of 12 conceivable foreign policy goals and asked Reagan to pick two or three so that success could be pursued through concentration. Without explanation the president picked “all 12.”

Word of Reagan’s incompetence began to get around. Anthony Lewis, for example, complained in The New York Times about “a President with a seven-minute attention span.” When prevailed upon to sign papers, issue statements, and make telephone calls, he sometimes misunderstood the purpose and forgot the results. It was said that he napped or wool-gathered at meetings. Eventually came a notorious incident in which he nodded off during a conversation with the Pope. An aide who asked not to be named told Lou Cannon that Reagan rarely asked for information about anything and “did not respond to 95 percent of the material brought to him.” Asked by Chief of Staff James Baker why he had not opened the briefing book prepared for him on the eve of a conference, he replied, “Well, Jim, The Sound of Music was on last night.” Once when Alexander Haig and Michael Deaver had been feuding over a State Department appointment, Haig bullied his way into the Oval Office and exacted a promise from the president to “think it over.” Apparently Reagan had no idea that he had already put Deaver’s man in the post. Bud McFarlane recalled a meeting at which congressional leaders and the secretaries of defense and state deliberated on the best way to deploy MX missiles. “Reagan’s only contribution throughout the entire hour and a half was to interrupt somewhere at midpoint to tell us he’d watched a movie the night before.” According to Edward J. Rollins, who headed the campaign for re-election in 1984, the candidate did not participate in any of the strategy and planning and was the butt of jokes among those who concocted “Morning in America.”

Years of “presiding” in this manner produced the situation Howard Baker discovered when asked to replace Donald Regan as chief of staff. Baker sent an assistant over to see what shape White House affairs were in and to scout out pressing problems. “Chaos” was the report that came back. “Staff system broken down.” Cabinet members doing whatever they pleased, aware that “the White House didn’t really matter.” As provided in the Twenty-Fifth Amendment, Reagan might have to be removed for inability to “discharge the powers and duties of his office.” He was not removed, but to the end staff practiced a maneuver they called “the Reagan argument.” In seeking approval for any policy switch or reversal they labeled it a change of tactics in pursuing the former policy, and he could not tell the difference.


Yes, Reagan’s doltishness belongs in any satisfactory account of the 1980’s. It will prove a godsend to future historians in search of anecdotes to keep students awake. There are reasons nevertheless why he should not be lumped with presidential ciphers such as Millard Fillmore and Warren G. Harding.

To begin with, he gets an upgrade of roughly 10 points for infirmity and inexperience, which are not the same as intrinsic stupidity. Reagan arrived in Washington old, hard of hearing, and out of touch. Then he was shot by a lunatic and fought a bout with cancer. A boy from a marginal family in the sticks, he had worked his way into the entertainment business during the Depression and stayed there past his prime. No wonder he mentioned movies when others discussed throw-weight and out-years. It was his only means of signaling that he was a person too, even if he knew nothing of their world and even if he had been removed from ordinary American life for 40 years.

A story told by Peggy Noonan, one of his speechwriters, indicates the distance between him and the society he was supposed to represent and govern. On the way from an airport to a university where he was scheduled to make a speech in 1984, his handlers had him stop at a McDonald’s to chat up customers and order something so he could be photographed biting into it. Folksy stuff, but he was stumped by the menu in this strange roadside place. According to Noonan, “He didn’t seem to have the faintest idea what a Big Mac was. Someone whispered to him. He brightened and nodded. He seemed relieved to hear he could get a hamburger here.”

Reagan gets an additional 5 points for sometimes disguising guile with goofiness. When opposed or called to account, he had slippery ways of lowering his consciousness to the point where communication was blocked.

Though he may not have cared a great deal about the poor and the weak, Senator Bob Dole, for example, had important constituents who cared a lot about the state of the U.S. Treasury, and the rising deficit troubled him. “Somebody else is going to have to take a hit besides welfare recipients,” he said bluntly at a meeting. “Bob’s getting at the same thing we found in California,” Reagan interjected and rambled on about loafers and cheaters. In March 1982 the chairman of the Senate Republican Campaign Committee was likewise worried about the deficit. Reagan responded with one of his make-believe stories: “You know, a person yesterday, a young man, went into a grocery store and he had an orange in one hand and a bottle in the other, and he paid for the orange with food stamps and he took the change and paid for the vodka. That’s what’s wrong.” The dignity and power of Reagan’s office discouraged rude retorts. “You haven’t been in a grocery store since the invention of frozen peas.” “If the man drank a bottle a day for 25 years, the bill wouldn’t equal a year of your salary.” Dissolving the vapors in this president’s head appeared more difficult than controlling the budget.

Guile over issues may be a stretch, but surely Reagan used dimness for self-protection—the lighter blame attached to someone regarded as simple-minded rather than deceitful and lawless. He perfected the technique long before he became president. Testifying before a grand jury in 1962, he was asked why as head of the Screen Actors Guild he had signed a waiver allowing MCA, the agency that represented him personally, to do business as both agent and producer, contrary to Guild rules and possibly in violation of anti-trust law. “Reagan’s strategy,” Gary Wills observed later, “was to retreat toward constantly expanding areas of forgetfulness.” All memory of the episode had somehow slipped his mind—maybe, he suggested, because he got married that year. After the illicit sale of weapons to Iran and the secret channeling of money to Reagan’s beloved Nicaraguan counter-revolutionaries—”the moral equivalent of the Founding Fathers”—John Tower, head of a newly assembled investigating board, bustled over to the White House, First off, he asked what the president knew about Israeli involvement. Reagan picked up a note given to him by his legal counsel before the meeting and read it aloud like a schoolchild. “If the question comes up at the Tower Board meeting, you might want to say that you were surprised.” Instantly the framework changed from suspicion of culpability to a question of mental competence. And the technique continued to work after Reagan left office, unimpeached and unindicted. To “supplement” a lifetime pension and $170,000 a year for office space he made a $7 million deal with a publisher for a so-called autobiography that he neither wrote nor read. “I hear it’s a good book,” he said to reporters on publication day, jauntily absolving himself from any responsibility for the merchandise.

A second reason why Reagan escapes the very bottom ranking is that he was a superb figurehead—not an easy role to sustain year after year in the glare of contemporary publicity.

A figurehead president must make enough reassuring executive noises and gestures to uphold the impression of a legitimate government even among those who object to it. Reagan was good at this. He always wore a suit in the Oval Office, never a lame Jimmy Carter sweater. When photographed on vacation at his ranch, he wore jeans rather than jodhpurs to show that he was virile and a regular guy. With the help of technicians, he approached perfection. In the ads for his 1984 re-election campaign, electronic augmentation of the sound track made his voice excruciatingly warm and husky.

An effective figurehead furthermore must convince a substantial part of the population that he or she is really their leader, not just an officeholder. Reagan accomplished this. When he talked of “reforming government” and “returning America to greatness,” roughly a third of the voters imagined that one of the feeblest managers and least informed men ever put at the head of their government was “a strong leader.” Repeatedly such words cropped up in interviews with the man and woman on the street. A voter in Milwaukee, for instance: “Even when he doesn’t say something, you know what he’s thinking. I think he’s really a strong leader.” “What he says goes,” this voter’s spouse chimed in. An unemployed couple in Detroit told an interviewer that despite reservations they were going to vote for Reagan because he would “keep people together.” Both Reagan and his followers preferred platitudes and fantasies to information. “We face a great task,” he told them as president-elect. He never said what the task was, and they never inquired.

What makes the role tricky, of course, is that a figurehead must leave policies, programs, deals, angles, and such to pro-business operatives who know the score. Executive gestures must be simultaneously convincing to the public and subordinate to what the staff and the lawyers, lobbyists, and interest groups are actually doing. A figurehead must not, as a genuine political leader would, push the levers of power and exploit the trappings of office on his own behalf. Given his lack of knowledge and curiosity, Reagan was well suited to stay out of the way. Exxon, Union Oil, and several owners of gas pipelines received billions in subsidies to build synthetic fuel plants. Generous tax breaks were granted to recipients of unearned income. Some 87 percent of Star Wars contracts were awarded to 10 companies. Whether any of this was noticed by Reagan is doubtful.

In line with his assignment as figurehead, Reagan personally stayed out of the way of most of the cash that sloshed back and forth under his administration. More officials serving under him were investigated, indicted, and convicted than under any other president. His first attorney-general made lucrative tax-sheltered investments with funds supposed to go into a blind trust. A later one filed a false income-tax return while in office. Only at the very beginning and the very end, however, and then primarily through intermediaries, did the figurehead fail to keep his own hands clean. According to the U.S. General Accounting Office, his first inauguration cost more than twice what was reported, including expenses charged to the Department of Defense without legal authority. The public didn’t care. When Reagan was caught lying about selling weapons to Iran and illegally channeling funds to the contras, they cared only a little, downgrading him from saintly leader to mortal politician.

If Ronald Reagan had stuck exclusively to his assigned role, lulling the populace while keeping his nose out of government, he would have been the greatest figurehead in American history. He still ranks quite high in that category, but toward the finish he momentarily stepped out of character. Briefly he talked like a real executive. “I’ve got to win one,” he said to a U.S. ambassador who asked what was going on in Nicaragua. He exerted himself like an active politician— personally putting the touch on King Fahd of Saudi Arabia for $24 million in the residential quarters of the White House. He communicated in code like an artful manager. After the Boland Amendment forbade all aid to the contras, he let Admiral Poindexter and his staff in the basement know that it would please their boss mightily if they nonetheless found a way to “keep the freedom fighters together body and soul.” Even figureheads have egos, it turned out, especially when inflamed by years of applause and mock deference.

The attempt to act on his own was bungled and exposed, and yet Reagan in some ways managed his end game more adroitly than the shrewd people who had set him up as a front man for capitalism. He aroused wild cheers at the 1988 Republican convention and left office for a cushy retirement. He answered “can’t recall” or words to that effect more than 100 times in the deposition he gave for John Poindexter’s criminal trial, and the lawyers found it difficult to attack a witness who had long since established a worldwide reputation as a dim bulb. In contrast, the sharpies and pros who chose him as a figurehead were stuck with monstrous public debt and deeper popular mistrust of the system they thought they knew how to game. Contorted ways of talking about budgets and term limits were forced on them for years afterward.

A final consideration in not simply writing Reagan off as a stooge is that his presidency demonstrated for decades to come the malign power of the invisible hand. Loosely constrained by law and custom but with no honorable social end in mind, countless individuals pursue whatever they perceive their self-interest to be by whatever means occur to them from day to day. As though guided by an invisible hand, however, disconnected and purely self-regarding acts cause chain reactions or cumulative results that harm a society.

Just by doing his job a man named Taft Schreiber, an executive at MCA, the agency that represented Reagan as an actor, made the first move that gave the invisible hand a grip. As standard practice the company had assigned him to cultivate the Republican Party and one of his colleagues to do the same with the Democrats. Although his client was washed up in movies and television, Schreiber knew from producers and directors that Reagan took the parts offered, reported to the set on time, and delivered lines as written, and he may have known that when Red hunters leaned on Hollywood after World War II Reagan toned down his enthusiasm for the New Deal and became an FBI informant. Schreiber had also heard the warm applause for the “creeping socialism” speech that Reagan delivered for General Electric at corporate banquets. It made good business sense to try to get Reagan a gig in politics.

Schreiber sold Reagan on the notion. He saw to it that his man formally switched parties and made contact with the Goldwater camp. He gathered an oil millionaire, a studio head, and other fat cats into a consortium that would bankroll a serious run for the governorship of California.

In all likelihood Schreiber counted on nothing more than currying favor with Republicans by feeding them a novel contender in an off year when ordinary political types hesitated to run against a seemingly strong incumbent Democrat. With luck he might place someone in Sacramento who would take his calls and occasionally come through with favors expected from governors—finding a job for a friend, telling the tax people to back off, routing a new highway along the edge of land held for speculation, etc. Although Schreiber apparently did feel ideologically compatible with Reagan and running “against government” might soften up the public for a steeper tilt toward business as a whole, a hard-headed executive would probably put that sort of conjecture at the farthest edge of his horizon.

The candidate himself, when the move into politics was proposed, took a deep interest in the financial arrangements but almost certainly did not draw up plans for what he would accomplish if he were in charge or even wonder whether he ought to be in charge. He just knew the job beat mall openings and dental floss commercials. It meant steady pay, generous perquisites, an entourage, and the respect and attention paid to current celebrity. Somebody besides his wife and brother would listen to his opinions. He would have something to do every day.

Only a step or two beyond this workday opportunism the invisible hand took charge. Ideas that had lacked luster when Calvin Coolidge presented them seemed fresh and exciting. Now they had an electrifying spokesman, and the nation was on its way to the harmful changes of the 1980’s.

The recession of 1981—82 cost the average American family more than $3000 in lost GNP. By and large the stalwarts who had put Reagan out in front as a figurehead did not regret loss falling on the poor, but it was not their intention to cause a general slump. Nor was it any part of Reagan’s own intent. Living high at the taxpayers’ expense, flattered at every turn, he could hardly believe a slump possible. As Gary Wills remarked in Reagan’s America, “Businessmen had to be brought in to tell him that the stories he was spreading about their happiness were false.”

Remote from his own children, contemptuous of student activism, perhaps unconsciously resentful of anyone who would be alive long after he was dead, Reagan was no friend of youth. Yet he had no reason to deplete the civic culture and arm the most restive group in society. He was neither malicious enough nor strategist enough to deliberately penalize the young. Contrived by the invisible hand, it happened nevertheless. Under Reagan gun control weakened and simultaneously unemployment among black teenagers increased from 38.9 percent to 43.6 percent. By 1998 three-quarters of young American adults (adjusting for inflation) earned approximately 25 percent less than their counterparts in 1973—a Reagan legacy.

Two changes that took hold in the 1980’s and continue today will affect the country and the world indefinitely. The first change was the sharp redistribution of wealth upward in the United States. Lou Cannon noted one indication: “In 1980 there were 4414 individual tax returns listing adjusted gross income of more than a million dollars. By 1987, in the heyday of “Reaganomics,” there were 34,944 such returns.” By 1989 the gap between the rich and the poor was the widest in 40 years. Concurrently the contribution made by corporations to federal revenue sank under Reagan from 13 cents to 8 cents of each tax dollar.

This upward redistribution went far beyond cronies and particular constituents. Undoing two generations of progress, the rich by the end of Reagan’s first term increased their share of national income by 9 percent over the poor. Absolute increases in income did little to mitigate this Coolidge-like division. Richard Leone, president of the Century Foundation, recently pointed to “a new wave of evidence that relative inequality in income and wealth contributes to a variety of social pathologies.”

The second change was America’s loss of position as the premier manufacturing nation. Beginning under Reagan and continuing ever since, nearly a quarter of the manufacturing components imported by the U.S. come not from overseas sweatshops but from several countries that pay higher wages than the Americans. In an article called “Unsustainable,” Eamonn Fingleton notes that credit card operations, the automobile industry, printing, and broadcasting would soon grind to a halt in the U.S. without machines from Japan, for example.

The invisible hand was indeed destructive. How remarkable that changes of such magnitude should be associated with a dim old actor who when Michael Deaver picked up a $600 tab for an unofficial meal in Paris said “Here, let me get the tip” and offered a $5 bill.


Future historians will find it easy to convey the flavor of the 1980’s. Plenty of anecdotes along the following lines are on record. At a fund-raising dinner in 1984 the president of the United States praised one John Mariotta, head of the newly founded Wedtech corporation. “A hero for the eighties” he called him. In 1986 Wedtech went bankrupt, and two of its directors were charged with fraud and influence peddling. For the most part, those who combined empty words with sleazy behavior were regarded as heroes in the 1980’s.

Also future historians will have no trouble understanding Reaganism as an American example of the ancient practice of political puppetry. The gist of it was to put a videogenic executive impersonator out front who would not interfere with trade associations, lawyers, lobbyists, and others doing the important work. Republicans are currently enamoured with this scheme because it worked so well for them, and parties and factions as yet unborn will no doubt try it too from time to time. At such moments the Reagan administration will serve as a benchmark by which to recognize the scheme and gauge new twists.

The challenge for historians and everyone else in the future will be to explain the evil workings of the invisible hand. Brilliant though he was, Adam Smith could hardly escape the influence of Judeo-Christian thought, which granted humans dominion over the earth under a metaphysical Supreme Commander. Nor could he, in a world of scarcity, very well disparage growth of the labor force, transportation, and manufactured goods. Hence his loaded words— “invisible hand”—form a framework now ready for retirement. Given less supernaturalism, obvious problems with waste and maldistributed abundance, and sophisticated knowledge of feedback loops, the time is coming for an improved economics guided by a new metaphor. For the next Adam Smith, Reagan’s presidency will be a treasure-trove of raw data.


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