Cutting income taxes for Americans, especially for wealthy Americans, was Reagan’s dearest cause and the beating heart of his policy agenda. Beefing up America’s military was his second priority. These commitments were the twin pillars of Reagan’s 1980 platform. Reducing the federal government’s (nonmilitary) spending took a distant third place—although, to gain fiscal credibility, the Reagan team would tackle spending before pushing its tax-cut bill on Capitol Hill. An “alarmist” memorandum on economic policy prepared for the incoming leadership team stressed the need for severe cutbacks in government spending. Its author, David Stockman, a sitting House member from Michigan, was named the new head of the Office of Management and Budget (OMB).1 Other matters were not deemed worth fighting for. Religious conservatives found that top White House officials treated their demands concerning such issues as abortion and school prayer dismissively. In 1982, Reagan conceded to a journalist that such questions were, to him, “very vital and very important, but they’re a periphery to a philosophy.”
QUESTION: “They are not the essence of what you’ve been crusading about?”
REAGAN: “No.”
QUESTION: “They are adornments, they are filigree, so to speak?”
REAGAN: “Yes.”2
“The president absolutely loathes and despises taxes,” remarked Richard Darman, a key White House tactician during Reagan’s first term as president.3 This belief was truly personal for Reagan, as well as a matter of principle. He frequently recounted how, in his Hollywood days in the 1940s, he and his friends “quit working after four pictures and went off to the country,” because Washington’s stratospheric marginal tax rates would take most of the earnings from any further work. The lesson was clear: high taxes were punitive and self-defeating. To Reagan, taking wealth from creative people—like him—to fund those without his gumption and positive attitude was wrong. He had long socialized with wealthy men from California, like Holmes Tuttle, a car-dealership entrepreneur, Charles Z. Wick, who had made his fortune producing low-budget movies and running for-profit nursing homes, and Justin Dart, the founder of Rexall Drug—men who likewise resented paying taxes. Confiscating large fortunes, which was how wealthy conservatives viewed progressive taxation, was a perversity, a way of bringing society’s extraordinary individuals to heel. Like Ayn Rand writing of her hero John Galt in her novel Atlas Shrugged, Reagan knew that attempts to tear down great men pointed the way to society’s decline.4
Reducing the marginal income-tax payments of Americans below the top bracket was the political price to be paid for the administration’s true aim: cutting taxes for the rich. Donald Regan, the Wall Street executive who became Reagan’s first secretary of the treasury, noted that Reagan’s tax-cut proposal “targeted more benefits to those in upper tax brackets, the people most likely to save and invest.”5 In general, Reagan’s team showed caution in broadcasting such frank comments. The conservative columnist George Will, whose close association with Reagan’s campaign made him a star in the Washington media, acknowledged the calculation. “Kemp-Roth links an emotionally rational [sic] act (cutting taxes of the investing class) to a politically palatable act (cutting everyone else’s taxes),” as he put it.6 Some supply-siders were willing to restrict the tax cuts to wealthy Americans only. Reagan, politically more astute, rejected such counsel.
Reagan could afford to do so rather easily, because the tax cuts he proposed for less affluent Americans were small and would not greatly alter the government’s finances. Reagan’s proposal to cut marginal income-tax rates by 30 percent in all tax brackets (Kemp-Roth) was not always well understood. Kemp-Roth and, later on, the measure ultimately signed by Reagan, the Economic Recovery and Tax Act of 1981 (ERTA)—which cut marginal rates by 23 percent over three years—were routinely described as if they cut individuals’ overall tax bills by such whopping figures. The reality was more complicated. First, Reagan did not propose lopping 30 percentage points off these marginal tax rates; rather, he wished to make the rates 30 percent smaller (e.g., a 50 percent rate would drop to 35 percent). Most important, marginal rates described the tax charged not on all income, but, rather, only on those dollars earned above a certain income level. In 1980, the highest marginal tax rate on investment income was 70 percent, and the highest marginal rate for wage and salary income was 50 percent. But the 1 percent of Americans with the largest incomes in 1980 paid, on average, an overall federal income-tax rate of 29.8 percent.7
“Supply-side economics” was the term used to argue that lower marginal tax rates on these high earners would strengthen the flow of money into bank accounts and productive investments. This process, in theory, would lead to higher rates of economic growth in the long term. In the 1970s, while conservative ideas in general had gained ground among economists, supply-side theory in particular remained rather peripheral in academia.8 It was vaulted to political prominence, however, by the editorial pages of the Wall Street Journal, which served as a “bulletin-board” for conservative ideas.9 In Washington, supply-side arguments became closely associated with an ebullient coterie of promoters, including Representative Kemp and the wonderfully named Arthur Laffer, a colorful economist—“Short in stature, tall in enthusiasm,” according to a fellow supply-sider—who was known for describing a curve purporting to show that if tax rates were cut, the U.S. government would actually see increased tax revenues.10 This reversal would occur because tax rates, if raised too high, passed a point of negative returns, badly discouraging economic investment. Assuming the United States tax code had passed that point, moving backward on the “Laffer curve” would enhance the incentives to invest so greatly and spur such an explosion of new wealth that the number of dollars taken in by the IRS would go up, even as wealth was taxed at a lower rate.
In fact, no historical evidence supported the notion that the United States lay on the curve’s far side.11 The curve was merely a marketing device used to reassure nervous voters and congressmen that basic arithmetic—which foretold that huge tax cuts and an enormous increase in the Pentagon’s budget, with no budget cuts of similar dimensions in prospect, would produce skyrocketing government deficits—could be safely ignored. Reagan, when introduced to the Laffer curve in 1980, was sold; the theory merely confirmed his longstanding conviction that taxes on the rich were too high. At a press conference on February 19, 1981, Reagan explained, “There’s still that belief on the part of many people that a cut in tax rates automatically means a cut in revenues. And if they’ll only look at history, it doesn’t. A cut in tax rates can very often be reflected in an increase in government revenues because of the broadening of the base of the economy.”12 In 1980, the Reagan campaign had assembled a panel of economists, led by Alan Greenspan and Martin Anderson, to assure the press that Reagan’s numbers added up. These experts made large but vague promises about economic growth and potential budget cuts in a Reagan administration. (Years later, Greenspan commented with nonchalance, “I believed that if spending was restrained as much as Reagan proposed . . . the plan was credible.”13)
However, the soul of supply-side doctrine was the promise of booming economic growth, not the magical pledge of a balanced budget. The political allure of that promise was clear. From the 1930s through the 1960s, Republicans had preached the gospel of balanced budgets, and it had done them little good politically. “The Republicans’ austerity approach to the deficit gave them their image as the party that takes away,” wrote Paul Craig Roberts, the top supply-side economist in Reagan’s government. Saddled with that commitment, they were a minority party for half a century.14 But they prided themselves at least on being able to add and subtract, which is why George Bush, campaigning in 1980 against Reagan, had called Reagan’s fiscal proposals “voodoo economic policy”; Bush was offended on behalf of Republican orthodoxy.15 Democrats, meanwhile, since World War II had embraced Keynesianism, the doctrine of economic growth through government spending and tax cuts. Supply-side economics became the GOP answer to Keynesianism. Republicans would use supply-side ideas to free themselves from the shackles of fiscal conservatism and present themselves as champions of “growthmanship.”16
Criticism of Keynesianism became politically trenchant in the 1970s. Conventional economics held that unemployment and inflation worked against each other; as one index rose, the other fell. However, in the 1970s, the problem of “stagflation,” in which growth slows, unemployment increases, and prices rise all at the same time, became pressing. Keynesian doctrine did not seem to provide an adequate response to this situation. At this policy impasse, supply-side advocates sensed they could displace Keynesian dogma in the corridors of government.
Reagan’s tax-cut proposal found a warm reception across party lines, in big sections of the country. The South, long a Democratic Party stronghold, was by tradition the home of crackpot financial nostrums that promised something for nothing. Southern Democrats, at the end of the 1970s, offered qualified endorsements of supply-side doctrine. In 1980, Jimmy Carter’s top domestic policy advisor said that “economic policy of the 1980s must place greater emphasis on the supply side of our economy.”17 The Joint Economic Committee of Congress, chaired by Democratic senator Lloyd Bentsen of Texas, issued reports in 1979 and 1980 making the supply-side case for cutting tax rates to spur higher rates of growth through enhanced investment, not increased consumer spending. This line of argument amounted to “Reaganomics before Reagan.”18 By 1980, the Southeast had lost pride of place in the tax-cut crusade to the Mountain West and the Southwest. One-third of Senate Republicans from the Southeast cosponsored the upper chamber’s 1978 version of Kemp-Roth (sponsored by Sam Nunn, Democrat of Georgia); over half the Southwest’s GOP senators did, as did every one of those from the Mountain West.19 Reagan was their man.
In his distaste for détente—the Nixon-Ford policy of reducing superpower tensions—Reagan also had much company in Washington. In the wake of the Vietnam War, the Democrats were split over whether to continue the Cold War tradition of Harry Truman and John Kennedy. While some reconsidered traditional assumptions about the wholesomeness of U.S. military activities around the world, others joined conservative Republicans in protesting Nixon’s strategy of identifying areas of converging interests with Russia and China. Most Southern Democrats, still a large group in Congress, remained strong Cold Warriors. The original foreign policy “neoconservatives” were post-Vietnam associates of Democratic senators Hubert Humphrey of Minnesota and Henry “Scoop” Jackson of Washington, liberals on domestic policy and stalwart foes of communism. Younger torchbearers, led by Richard Perle, a Jackson protégé, and Jeane Kirkpatrick, a Georgetown University professor whose husband, Evron, had been Humphrey’s teacher years before, sought a cross-party alliance against détente starting in the mid-1970s, arguing with some effectiveness that they carried the ark of the Democratic Party’s covenant against totalitarianism.
At the same time, advocates of an aggressive anti-Soviet policy conducted operations inside the Republican Party. Gerald Ford and his director of central intelligence (DCI), George Bush, agreed to allow a panel of outside authorities, labeled the B Team or Team B, to conduct an audit of the Central Intelligence Agency’s (CIA) alleged insouciance regarding the Soviet military threat against U.S. security. Headed by Harvard University historian Richard Pipes and deriving authority on questions of arms and strategy from Paul Nitze, a gray eminence of America’s security establishment, Team B concluded, to no one’s surprise, that the Soviets were far more dangerous than the CIA understood.20 Nitze had begun making his name among strategic thinkers in 1950 by authoring NSC (National Security Council) 68, a key document of the Cold War. NSC 68 argued successfully for placing the nation on a permanent war footing to prevent forceful communist advances around the globe—advances that might leave America the proverbial island of freedom in an ocean of tyranny.
Ultimately, the CIA’s more skeptical prognosis about the future health of Soviet Communism proved the more accurate.21 But during the Carter years, voicing such disbelief seemed, to politicians in Washington, increasingly unwise, as the purported lessons of the Vietnam debacle for American foreign policy shifted from the perils of imperialistic hubris to the cancerous danger of internal dissent and the disastrous consequences of a weakened will to fight in remote places. Carter believed the Soviet system was doomed, and that American values “have a magnetic appeal for people all over the world.”22 Paradoxically, Carter’s utter confidence in America’s eventual triumph over its adversary was widely construed as a failure of vigilance against the enemies of liberty.
In 1976, the writer Norman Podhoretz, with others including Nitze, Kirkpatrick, Perle, Eugene Rostow (the former dean of Yale Law School and a high official in President Lyndon Johnson’s State Department in the 1960s), and William Casey, Reagan’s second 1980 campaign manager (who had run clandestine operations in the Office of Strategic Services, forerunner to the CIA, during World War II), revived the name of an old organization, the Committee on the Present Danger (CPD), to press the case for confrontation, not détente. They deemed amoral the “realism” of Henry Kissinger, who had captained foreign policy under both Nixon and Ford. Using language that alluded unsubtly to Britain’s effort to make peace with Nazi Germany in 1938 by abandoning Czechoslovakia to German advances, CPD members lamented the “culture of appeasement” that, they claimed, led Americans in the 1970s to value peace over justice.23 Podhoretz argued that America’s cultural elite had grown effete and would let the Soviet bully have its way with its chosen targets.24 The neoconservative appeal was tailor-made for Reagan, a member of the World War II generation who signed up for the Cold War well before he became a Republican. As Garry Wills observes, even if some found it hysterical, the rhetoric of Team B and the CPD was in keeping with the tone of the Cold War consensus that had reigned in Washington between 1950 and 1970. Reports claiming imminent Soviet strategic superiority had issued from august expert panels throughout the 1950s; indeed, “doomsday scenarios had . . . been the basis of national policy.”25 Only in the years after America’s defeat in Vietnam did a major wing of the Washington establishment come to see such “scenarios” as irrational.
Opponents of détente made two different arguments in support of their thesis that the Soviet Union posed a newly potent threat. One was technical, the other easily grasped.
Nitze, Perle, and others testified tirelessly in public about the impressive “throw-weight” that Soviet land-based nuclear missiles represented. If they were correct, size and heft meant strategic power. The USSR had more and heavier intercontinential ballistic missiles (ICBMs) than did the United States. The alarmists warned that this edge brought the superpower relationship out of balance, because it might lead Soviet leaders to contemplate a nuclear first strike against America. In turn, Washington might back down from confrontations for fear of triggering such an apocalyptic attack by an overconfident Soviet Union. The real strategic danger was not that the United States and the USSR would blow up the world, but that nuclear blackmail would embolden Soviet meddling, both political and military, everywhere outside U.S. borders, and that such aggression would succeed in intimidating a frightened America. Many Americans had voiced similar concerns since the 1960s. Democrat John Kennedy had conjured a nonexistent “missile gap” during the 1960 presidential campaign. Conservatives long had warned that a growing Soviet edge in the arms race would empower the Russians to win the fight for world domination “without firing a shot” at the United States—as an oft-heard phrase put it. By 1980, those expressing such fears of Soviet superiority had migrated almost entirely to Reagan’s camp. Only in the light of such views did Reagan’s comment in his inaugural address—that America wanted peace but that “we will not surrender for it, now or ever”—make sense.26
The greater numbers of Soviet ICBMs were counteracted by U.S. superiority in bomber-carried nuclear warheads and a likely technical advantage in submarine-launched missiles. (These three delivery systems were known as the nuclear “triad.”) The sea-based nuclear deterrent would be, as all the world’s militaries knew, effectively impossible to defend against if used, and was therefore an adequate nuclear deterrent by itself. Even U.S. land-based ICBMs were intentionally made lighter to increase their accuracy, as authorities like Nitze understood full well.27
Heated debate about missile arsenals left many Americans scratching their heads, but a simpler argument also was made against détente: world events formed a global U.S.-Soviet struggle, and the Soviet side was making geographic gains. In the late 1970s, charges that the Soviets were stealing a march on the United States focused on events in Africa and Central America, despite the doubtful strategic importance of these areas. Struggles for power developed in Angola and Mozambique after their liberation from Portuguese colonial rule in 1974. Cuba, supported by the Soviet Union, dispatched troops to help leftist revolutionaries win power in Angola; the United States supported other forces diplomatically, fearful of a new Soviet client state. Conservatives adopted Jonas Savimbi, leader of an armed group in Angola, as their favored proxy in the region, hoping to see the United States support him directly. Henry Kissinger, the American face of détente in the 1970s, told Soviet Foreign Minister Andrei Gromyko that “the Soviet Union has nothing to gain in Angola. We have nothing to gain in Angola. Five years from now it will make no difference.”28 Once the Soviets and Cubans were there, however, Kissinger’s enemies declared such remote conflicts meaningful simply because the Soviets and Cubans were there. The white-supremacist regime in South Africa, which Reagan and others viewed as a vital anti communist ally, was determined to intervene militarily in Angola and in Namibia, supporting Savimbi; Pretoria, given cool treatment by Carter, would find a sympathetic ear in Washington with Reagan in power. Meanwhile, in northeastern Africa, the socialist Mengistu Haile Mariam’s regime in Ethiopia enlisted extensive Soviet aid in its struggle against aggression from bordering Somalia.
In Central America, leftists also appeared to be on the march. The socialist Sandinista movement displaced Nicaragua’s dictator, the longtime U.S. ally Anastasio Somoza Debayle, in 1979. The right-wing government in El Salvador, which also relied on Washington’s patronage, faced a guerrilla movement that threatened to duplicate the Sandinistas’ feat. Carter tried and failed to keep the Sandinistas hemmed in by a coalition government after Somoza was gone, but he agreed to continue aid to the new government anyway. Carter cut off aid to the Salvadoran government in 1980 after the well-publicized rape and murder of U.S. churchwomen by military forces there (see chapter 4), but restored it when the government seemed endangered by rebel advances. The conservative charge that Nicaragua had become a “second Cuba,” and that El Salvador might become a third, was too much to withstand politically. Shooting wars in Central America, more than those in Africa, would become matters for sustained controversy in the United States in the 1980s. But, in the late 1970s, conservatives who argued that détente was a fool’s game pointed to expanding zones of Soviet influence and newly declared socialist regimes everywhere on the globe as evidence. As Reagan put the case at his first news conference after taking office, “So far détente’s been a one-way street that the Soviet Union has used to pursue its own aims.”29
Efforts to discredit détente helped to elect Reagan in 1980, and his new conservative foreign policy would take its most definite form in Reagan’s command to build a fresh arsenal of missiles, warships, and bombers. Neoconservative rhetoric seemed to recommend confrontation; Washington’s willingness to fight, doubtful since Vietnam, had to be reestablished. Yet Reagan had campaigned not on a pledge to fight the Soviets but, rather, by promising to back them down by building up America’s strength. As Reagan said at his inauguration, “We will maintain sufficient strength to prevail if need be, knowing that if we do so we have the best chance of never having to use that strength.”30 If one of the super powers were to be intimidated, it must be the Soviets, not the United States. Carter had already proposed increasing the Department of Defense budget by 4.5 percent annually for five years. Reagan had pledged similar increases, but he and his advisers started upping the ante after the election. As inauguration day approached, Washington was abuzz with talk of large numbers. Carter had forecast a total increase in military spending of $1.2 trillion, and Reagan of $1.6 trillion. But the military’s Joint Chiefs of Staff ultimately deduced that a figure between $2.35 trillion and $2.7 trillion was needed to meet Reagan’s strategic plans.31 The numbers were of a scale that soon became meaningless to almost everyone. But all agreed that massive sums of public money soon would flow, through Capitol Hill and the Pentagon, to military contractors. The U.S. military budget would increase by 17.5 percent in both 1981 and 1982, remarkable figures for a country not at war.32
Bristling with plans and verve imparted by Reagan’s unusually clear governing agenda (both domestic and foreign), movement conservatives streamed to Washington during the pre-inauguration “transition” period, and the Reagan team organized an enormous planning and staffing operation. Congress appropriated $2 million to pay the new administration’s transition costs, yet the effort became so big that private donors had to provide another $1.5 million.33 All perceived that the new men and women were planning to institute a deep change in the executive-branch bureaucracy, placing movement cadres several layers deep in federal agencies. One political scientist noted afterward that “the hostility of many . . . appointees to the programs they would administer was a common characteristic of Reagan’s choices for second-level positions. . . . There was achieved in this second round of appointments an uncommon degree of ideological consistency and intensity.”34
Reaganism’s cadres asserted that they were part of a rightward tide sweeping the world, especially English-speaking countries. Margaret Thatcher’s Conservative Party had toppled a Labour government in Great Britain in 1979; she would be Reagan’s closest ally abroad, and American conservatives admired her bracing, confrontational style of politics. Australia and New Zealand had seen parties relatively friendly to free-market policies take power in 1975. Canada’s Liberals, somewhat akin to U.S. Democrats, won the elections in their country in 1980, but their rivals, the Progressive Conservatives, led by Brian Mulroney, a warm Reagan ally, came back to score a breakthrough victory in 1984, gaining over half the national vote. The U.S. Republicans and Reagan’s government were more extreme in their pro-business, antiregulatory stance than conservative parties and regimes elsewhere.
Thatcherism and British politics are the most relevant international points of comparison to the American political scene, and the differences were important. Thatcher’s government came to a crisis early on because, unlike Reagan’s, it tried earnestly to balance its budget, which meant raising taxes on consumers and cutting spending severely amid a bad recession, in order to pay for income-tax cuts. The issue of organized labor and its power figured differently in the two political systems as well. One scholar of Thatcherism summarized Thatcher’s agenda as fostering “the free economy” but also “the strong state.”35 Thatcher wanted to show that the British national government still ruled its country, an imperative that was directed at the defiant stance of labor unions, which were very powerful in Britain’s Labour Party. The Democratic Party, in contrast, was not a labor party; American unions merely formed one interest among many that jockeyed for influence in it. Unions had little power to curb, and conservatives’ hostility to them was an issue of provincial rather than pervasive concern in American politics. Reagan’s essential message was antigovernmental—a message he delivered famously in his inauguration speech in January 1981: “In this present crisis, government is not the solution to our problem; government is the problem.”36 Reagan routinely offered exceptions to his doctrine of the weak state; he wanted a stronger military, and embraced a more robust apparatus of law enforcement and incarceration. Yet, unlike Thatcher, Reagan never truly incorporated these exceptions, large as they were, into his governing dogma. He and his cadres professed fidelity to the doctrine of the free economy and the weak state.
To some, Reagan appeared to have a broader agenda than conservatives elsewhere, because of his antipathy to guaranteeing the rights of racial minorities through the national government and, even more, his devotion to conservative religious morals. But the new administration was unwilling to risk precious political capital in public fights over these matters. Reagan contented himself, instead, with altering policy in these areas by curtailing funds to executive-branch agencies and through appointments. His appointees’ attitudes, particularly regarding racial inequality and business regulation, were starkly different from those of their predecessors during the 1960s and 1970s, in both Democratic and Republican administrations.
In race matters, Reagan rhetorically hewed to an individualist line, preferring to enforce simple antidiscrimination law but opposing affirmative action, which meant the use of broad patterns (in hiring, promotion, or housing, for example) as evidence of legal wrongdoing and in the formulation of legal redress for discrimination. During the 1980 campaign, Reagan had said, “We must not allow the noble concept of equal opportunity to be distorted into federal guidelines or quotas . . . to be the principal factor in hiring or education.”37 Once elected, he placed William Bradford Reynolds, a critic of affirmative action, at the head of the Civil Rights Division of the Department of Justice and did likewise in naming Clarence Thomas, who pledged to focus narrowly on charges of conscious discrimination against individual plaintiffs, to lead the Equal Employment Opportunity Commission (EEOC). Reagan’s judicial appointees also proved hostile to a statistics-based approach to racial discrimination, of the kind that the U.S. Supreme Court had validated in decisions such as the unanimous Griggs et al. v. Duke Power Co. (1971)—which ruled that the company, with a history of hiring discrimination, had violated civil rights law by giving job applicants “intelligence tests,” on which African Americans scored relatively poorly—and, by a 6–3 vote, in Fullilove v. Klutznick (1980)—which found that government “set-aside” programs, guaranteeing a certain proportion of contract business to minority-owned concerns, were legal.38 By the late 1980s, Republican-appointed judges would reverse precedent in these matters.
Yet Reagan, as president, proved both more politically calculating and more sweepingly unsympathetic toward complaints of discrimination than his campaign rhetoric had suggested he would be. Reagan never launched an assault on affirmative action either through legislative proposals or executive orders, disappointing some conservatives. Members of his own cabinet supported affirmative action, at least in some forms, notably George Shultz, secretary of state beginning in 1982, who had championed the policy in the arena of hiring and promotion during his service as President Nixon’s secretary of labor. Faced with disagreement among his cadres, Reagan ducked the issue, handing it to his judicial appointees for future—but potentially far-reaching—action.39 In early 1982, Reagan signed a twenty-five-year extension of the Voting Rights Act, a law he had opposed in 1965. Southern conservatives favored ending Justice’s supervision of their region’s elections, which the law required, but Republicans elsewhere showed little zeal for this cause; without GOP unity, Reagan would not wage this fight either. However, his appointees failed to fulfill the promise they offered to safeguard individual rights. Two years into Reagan’s presidency, the Justice Department and the EEOC had halved the number of employment discrimination suits they brought forward, and the Department of Housing and Urban Development simply stopped requiring federal contractors to certify that they complied with civil rights laws. There was no drop-off in the volume of housing discrimination complaints in the 1980s, yet the Civil Rights Division, in eight years under Reagan, brought as many cases forward in this area as it had during each year of Carter’s presidency.40 Reagan sometimes showed a remarkably understanding face toward those who engaged in overt racial discrimination. In 1981, at the behest of U.S. Representative Trent Lott, Republican of Mississippi, Reagan instructed Justice and Treasury to relent in the face of a lawsuit brought by Bob Jones University, which sought to keep its tax-exempt status despite its openly segregationist policies. “I think we should” take Bob Jones’s side, Reagan wrote. But after the resulting criticism, Reagan’s staff got him to back off from his sincere initial move to defend Bob Jones.41
Unlike efforts to relax the enforcement of civil rights, aggressive moves to propagate conservative Christian morality through the law were not consistent with the doctrine of the weak state, and such exertions made limited headway in the new government. Reagan supported cutting Medicaid funds that paid for poor women to obtain abortions. Other than this change—important as it was—the religious right mainly got lip service from Reagan. When he nominated Sandra Day O’Connor, a pro-choice, pro-ERA Republican from Arizona, to the Supreme Court in July 1981, religious conservatives felt they had been kicked in the teeth.
Business lobbies, however, knew they now had friends in Washington who would fight to vitiate proconsumer or prolabor statutes and agencies. The best-known case was James Watt, a leader in the corporate fight against the regulation of mining and logging on public lands in the West, who became secretary of the interior, responsible for overseeing public lands. Watt invited controversy and had to resign his position in 1983, but many others with a similar outlook served at the subcabinet level and attracted little public attention. Watt’s assistant secretary for natural resources and the environment was a lumber-industry lawyer. Organized labor was an inviting target for a government that catered to business lobbies. Reagan named John Van de Water, previously the head of a prominent “union-busting” law firm, to chair the National Labor Relations Board.42
Deregulation of business had become a bipartisan affair in the 1970s, another instance—like cutting capital-gains tax rates—in which Reagan can fairly be said to have extended something Carter and the Democrats started. However, the deregulation of airlines, trucking, and railroads—efforts spearheaded by Democrats before 1981—represented a repudiation of some of the earliest forms of federal regulation that, many believed, were stifling competition and keeping prices high. “Quality of life” regulations, such as the Clean Air Act, were supported staunchly by Democrats. Reagan’s deregulatory zeal was more comprehensive. But his ability to legislate a rollback of recent regulatory measures was uncertain. As William Niskanen, an early member of Reagan’s Council of Economic Advisers, noted, “The new administration would have substantial support for reducing the traditional forms of economic regulation”—meaning older forms; this would prove true most of all in banking—“but very little support for reducing the newer types of regulation of health, safety, and the environment.”43 Indeed, Congress would not agree to relax pollution controls as a matter of law. Yet Reagan reduced the Environmental Protection Agency’s (EPA) budgets for water quality and air quality enforcement by 59 percent and 31 percent, respectively, between 1981 and 1984.44 He might have gotten further than he did in turning the EPA around, but his top appointees there, Anne Burford and Rita Lavelle, were so bold in their efforts to undermine EPA’s mission that, in disgrace, they were forced to lead an extraordinary mass resignation of over twenty EPA appointees in 1983. Congress cited Burford for contempt when she refused to provide documents concerning the “Superfund” toxic-waste clean-up program. Lavelle served time in prison after receiving a conviction for lying in her congressional testimony and obstructing justice in order to protect her former employer—exactly the sort of corporate polluter that Superfund was supposed to hold accountable.45
In most cases, the business agenda could be pursued by favorably interpreting existing regulations. In early 1981, a lawyer who worked for industry commented, “None of the lawyers I know can remember anything like the impact the election has had on the regulatory agencies. They’re offering me things I wouldn’t have dared to ask for before.” C. Boyden Gray, who would serve as legal counsel to a new Presidential Task Force on Regulatory Relief, encouraged members of the U.S. Chamber of Commerce in April 1981 to use the task force as a means of circumventing regulatory agencies, which were likely to be stocked with career civil servants not imbued with the new spirit. “If you go to the agency, don’t be too pessimistic if they can’t solve the problem there. That’s what the task force is for.”46 Reagan, after taking office, quickly chilled the prospect of new regulations, issuing orders requiring “cost-benefit analysis” of such proposals.47 This method was a standard proposal from business lobbyists, who devised dire projections of the economic damage that business regulation would wreak; it left no room for any social good such laws might accomplish that was not a matter of dollars and cents. Whether the issue was curbing television product advertisements aimed at young children, mandating safety standards for car bumpers, or setting more stringent limits on contaminants in drinking water, the administration’s approach would follow a pattern: slow things down, require further review, and provide additional opportunities for business corporations to appeal. Where public interest groups such as environmentalists wanted to block private action they deemed harmful, the method was the opposite. Before 1981, those objecting to damage wrought on protected wetlands areas by authorized private development had five appeals they could make, and these could last years. With Reagan and Watt in office, such appeals were cut from five to two, and limited to ninety days.48
While Margaret Thatcher and her British followers thought they needed to inject new legitimacy into the pursuit of wealth and profit in a society grown hostile to pecuniary values, American conservatives in the early 1980s felt more confident. In the American conservative view, only liberal snobs derided material pursuits. The problem, as conservatives saw it, was not that money was unloved in America, but rather that cultural elites who exhibited distaste for capitalism had become entrenched in government and other important institutions. At a 1981 convention of Young Americans for Freedom, a major conservative movement group since its founding in 1960, the assembled activists sang lustily, “God Bless free enterprise,/System divine./Stand beside her, don’t deride her,/Just so long as the profits are mine.”49 Reagan declared in his inaugural address, “It is my intention to curb the size and influence of the Federal government,” and averred that the secret to America’s wealth was that “here in this land we unleashed the energy and individual genius of man.”50 Private enterprise must be honored and protected. The tax cuts were the heart of Reagan’s agenda. But the animating spirit of Reaganism was the drive to liberate the sleeping giants of American wealth and enterprise from the fetters of social obligation, and to make such a flight from obligation unashamed and free from rebuke.