Tuesday, October 20, 2009

the great myths of ronaldus magnus

Can you imagine how the right-wing noise machine would react if President Obama:

  • Increased federal spending as a percentage of the economy to levels previously seen only during World War II.
  • Tripled the national debt.
  • Dramatically increased Social Security payroll taxes on employees and employers.
  • Increased the capital gains tax to 28%.
  • Raised gas taxes.
  • Increased federal government employment.
  • Created a massive new cabinet department.
  • Sold arms to Iran.
  • Withdrew entirely from a Middle Eastern war zone in response to a single deadly terrorist attack against US troops.
  • Funded terrorist groups in our own hemisphere.
  • Signed a treaty committing to make deep cuts in our strategic nuclear weapons.
  • Proposed the total elimination of nuclear weapons.
I'm sure there would not be enough tea in India to express the wingnut outrage.

And what if the most expensive federal office building in history was subsequently named after him? I'm sure it would be mocked as a fitting legacy to this “big government” president.

The president I'm describing is, of course, Ronald Reagan.

Is it just me or have you noticed a surge in Ronald Reagan adulation lately? Of course, he achieved Republican sainthood a long time ago. But for the past eight years it was Bush who could do no wrong. Anyone who criticized Bush hated America and if the critic happened to be a Republican he or she was excommunicated. Even as he left office during the worst economic crisis since the Great Depression, with the federal deficit running well over $1 trillion/year and two wars going badly, Bush still commanded an approval rating among Republicans of 75%. Think about that. Three out of four Republicans still thought Bush had done a good job. (And that was even after the financial and auto bailouts, now the subject of rage among many of those very same Bush supporters.) Makes you wonder what it would take for Republicans to think he had screwed up.

In fairness, Republicans now seem to have more or less thrown in the towel when it comes to defending Bush's legacy. So they have had to reach back over twenty years to Reagan for a time when their Dear Leader could do no wrong. (Bush's recent disappearance from Republican idolatry is kind of like one of those Chinese Communist Politburo photos that has been altered to remove the guy who is now in prison.)

Last week, the new Republican National Committee Web site was launched and it included in its “GOP Heroes” section a
reference to Reagan as “Ronaldus Magnus” (that’s Latin for “Ronald the Great”). Now, I will confess to being among those who hold President Obama in high regard. But as far as I am aware the Democratic Party hasn’t taken to referring to him with a title befitting a Roman emperor.

One of Reagan’s biggest cheerleaders over the years has been his former speechwriter and now Wall Street Journal op-ed writer Peggy Noonan. She had a
Journal piece last week saying that it was “absurd” that Reagan hadn’t gotten the Nobel Peace Prize for bringing about the fall of the Berlin wall.

Which is what prompted me to write this post.

The myth that Reagan brought about the end of the Cold War has become so entrenched that it is no longer even questioned. Next time someone makes that assertion, pose this one-word question: “How?”

You might get an answer something like this: Reagan gave a speech where he said, “Mr. Gorbachev, tear down this wall,” and 29 months later the Berlin Wall came down. What more evidence of causation do you need? Post hoc ergo propter hoc (“After this, therefore because of this”). “A” happened, then “B” happened. Therefore, “A” caused “B”. For example, I can stand on the beach at high tide and successfully command the water to recede. And unlike Reagan and the Berlin Wall, I can repeat this trick. Twice a day.

A more sophisticated theory of how Reagan ended the Cold War goes like this: Reagan’s big military build up caused the Soviets to overspend in an attempt to keep up which bankrupted the Soviet economy. This explanation has the benefit of a plausible theory of causation. But let’s break it down. We spent a huge amount of money on the military during the ‘80’s (a true statement). The Soviets tried to keep up with our escalating military spending (an untrue statement). The Soviet economy collapsed (a true statement). Can you spot the problem? The Soviets didn’t attempt to match our military build up. We greatly increased our military spending during the ‘80’s (tripling the national debt in the process),
but the Soviets didn’t.

The Soviet Union's defense spending did not rise or fall in response to American military expenditures. Revised estimates by the Central Intelligence Agency indicate that Soviet expenditures on defense remained more or less constant throughout the 1980s. Neither the military buildup under Jimmy Carter and Reagan nor SDI had any real impact on gross spending levels in the USSR. At most SDI shifted the marginal allocation of defense rubles as some funds were allotted for developing countermeasures to ballistic defense.

If American defense spending had bankrupted the Soviet economy, forcing an end to the Cold War, Soviet defense spending should have declined as East-West relations improved. CIA estimates show that it remained relatively constant as a proportion of the Soviet gross national product during the 1980s, including Gorbachev's first four years in office. Soviet defense spending was not reduced until 1989 and did not decline nearly as rapidly as the overall economy.
Go ahead – research it yourself. Google (or “Bing”) “soviet military spending” and read everything you can find on the subject. You can start
here or here or here. Or just take my word for it. This is not a matter of serious factual dispute.

A lot of things contributed to the collapse of the Soviet Union. Basically, their economic system sucked. You’d think right wingers would be satisfied with that explanation. You don’t really have to come up with a heroic story line with the US at the center – Soviet-style communism was perfectly capable of collapsing on its own. But if you do need US heroics, you can point to the policy of “
containment” begun with Truman and George Keenan and supported by both parties for 40 years. (The wingnuts at the time wanted to pursue a policy of “regime change” against Stalin, but after two world wars our country wasn’t much in the mood for more war, especially against a country that had been our ally in defeating the Nazis.)

I would argue that a key event in that Cold War history was the signing of the Helsinki Accords in 1975 by President Ford, whereby the Soviet Union agreed to international principles of human rights, which gave rise to groups monitoring human rights within the Soviet Union and its satellites. As noted in

However, the civil rights portion of the agreement provided the basis for the work of the Moscow Helsinki Group, an independent non-governmental organization created to monitor compliance to the Helsinki Accords (which evolved into several regional committees, eventually forming the International Helsinki Federation and Human Rights Watch). While these provisions applied to all signatories, the focus of attention was on their application to the Soviet Union and its Warsaw Pact allies, including Bulgaria, Czechoslovakia, East Germany, Hungary, Poland, and Romania.

According to the Cold War scholar John Lewis Gaddis in his book "The Cold War: A New History" (2005), "[Leonid] Brezhnev had looked forward, [Anatoly] Dobrynin recalls, to the 'publicity he would gain... when the Soviet public learned of the final
settlement of the postwar boundaries for which they had sacrificed so much'...
'[Instead, the Helsinki Accords] gradually became a manifesto of the dissident and liberal movement'... What this meant was that the people who lived under these systems — at least the more courageous — could claim official permission to say what they thought."

Another key event was the rise of the Solidarity movement in Poland which began the unraveling of Soviet control of Eastern Europe. Polish independence was certainly encouraged by native son Karol Józef Wojtyła becoming Pope John Paul II in 1978. But it was the famous strike at the Lenin Shipyards in Gdańsk, led by Lech Walesa, that gave birth to Solidarity, the first non-communist controlled trade union in the Warsaw Pact countries. That was in September of 1980 – when Jimmy Carter was president (if only Walesa had held off another four months this, too, could have been credited to Reagan).

Another factor was the spread of information technology that helped undermine centralized control. I traveled to the Soviet Union in 1990 just as it was collapsing. Their economy was bleak. I remember being told by people I met that they always knew they had it tough, but they had been led to believe that they had it much better than those of us in the West. It was the decentralization of information technology (the fax machine was the revolutionary technology at the time) that made Soviet citizens aware of just how bad they had it. That brought with it a huge sense of betrayal – that their leaders had been lying to them all those years and they had been enduring hardships to no good end.

The Soviet Union’s nine-year quagmire in Afghanistan certainly didn’t help things. As a result of the Soviet invasion of Afghanistan, in 1979, President Carter ended Nixon’s policy of “
détente” toward the Soviet Union and began funding the Mujahedeen fighting them in Afghanistan. He also imposed a trade embargo on the Soviet Union (and boycotted the 1980 Moscow Olympics). The Soviet Union eventually withdrew from Afghanistan in 1988 – leaving them drained militarily, economically and emotionally. (Afghanistan – where empires go to die.)

But perhaps the straw that broke the Soviet Union’s back was the collapse of oil prices in the ‘80’s. In 1980, as a result of the Iran-Iraq war drastically curtailing oil production in both of those countries, the price of oil reached a high of $39.50/barrel, a record high in inflation-adjusted terms until last year, equal to more than $100/barrel today. As energy conservation measures begun in the ‘70’s really kicked in (
between 1973 and 1985, the energy/gdp ratio in the US declined by 28%), the price of oil fell again, and by 1988 it averaged below $15/barrel for the year. That was great for big oil importers like the US, but bad for an oil exporter like the Soviet Union. (Oil prices continued to stay low, reaching an all-time annual low of less than $12/barrel in 1998 – in inflation-adjusted terms lower than at any time since World War II. Indeed, the poor performance of the US economy in the mid/late ‘70’s and early ‘80’s can be attributed largely to high oil prices, while the strong economy during the late ‘80’s and throughout the ‘90’s can be attributed, to a significant degree, to the collapse in oil prices.)

Oh, and it is probably worth noting that the Berlin Wall actually came down in November of 1989, ten months into the administration of George H.W. Bush, not under Reagan. The final collapse of the Soviet Union followed two years later, in 1991.

But Reagan was the rooster crowing just before dawn. Next time someone claims he caused the sun to rise, just ask, “How?”

(In fairness, I will give Reagan credit for recognizing Gorbachev as a true partner for peace and, against the strident objections of his wingnut advisors, agreeing with Gorbachev to big reductions in the nuclear arsenals of both countries. Much to the consternation of those advisors, Reagan even
agreed with Gorbachev at Reykjavik, Iceland in October 1986 on the ultimate goal of eliminating all nuclear weapons. This is a goal that President Obama has revived. But those were actions that, if anything, would have helped the Soviet economy not undermined it.)

Another claim I have been hearing a lot lately is that Reagan cut government spending. Unlike the causes of the end of the Cold War, this one is easy to dispel and the proof is objective and indisputable.

Federal spending as a % of GDP was higher under Reagan than under any president in US history before or since (other than four years during WWII). Here are the

1980 21.7
1981 22.2
1982 23.1
1983 23.5
1984 22.2
1985 22.9
1986 22.4
1987 21.6
1988 21.3
1989 21.2

[Note: I would attribute fiscal years 1980 and 1981 to Carter – I include them here just for comparison to the years that follow. The federal government’s fiscal year begins October 1, so by the time a new president is sworn in we are almost four months into that fiscal year. Given that there are lags in economic performance, and it takes a new president time to enact new policies, I credit that year to the previous president. For example, in the first three months of the fiscal year that just ended, the federal debt increased by over $500 billion – putting us on course for an annual deficit of over two trillion dollars. That was before Obama took office. This is not a perfect methodology but it is probably better than giving the incoming president credit or blame for the first partial year of his administration. In any event, it doesn’t change any of my basic points.]

(Spending stayed at about the about the same level during the administration of the first Bush, coming in at 21.4% of GDP in 1993. By the end of Clinton’s eight years, however, it had been reduced to 18.5% of GDP in 2001.)

Along the way Reagan also increased federal civilian employment by 60,000 (it declined by more than 400,000 under Clinton). And he created a new cabinet agency (the Department of Veteran Affairs).

Of course, as we all know, Reagan also cut taxes. What do you think happens when you increase spending and cut taxes? From the time of Reagan’s tax cuts in 1981 until Clinton and a Democratic Congress raised them in 1993,
federal debt increased more than four fold – from under a trillion dollars in 1981 to over $4 trillion by the end of 1992. (Under George W. Bush, it almost doubled again, increasing by over $5 trillion, from $5.6 trillion in January, 2001 to $10.7 trillion in December, 2008. As a percentage of GDP it went from 54% to 75% under Bush. And that’s not even counting the trillion dollar structural budget deficits he left behind.)

For those who think that President Obama’s campaign proposal to raise the tax on capital gains from 15% to 20% is “socialism” and will destroy the economy, please take note that Ronaldus Magnus raised the capital gains tax from 20% to 28% in 1986. And the economy did just fine over the ensuing decade before it was cut to 20% again in 1997. (I should note the Tax Reform Act of 1986 was one of the best pieces of tax legislation in my lifetime. Reagan, to his credit, worked in a bipartisan manner with Senator Bill Bradley and Rep. Dick Gephardt to eliminate almost every loophole in the Internal Revenue Code. It even eliminated the tax preference for capital gains. The result was a much simpler tax code and lower overall rates. Unfortunately, while the structural changes were good, overall rates were left too low to pay the bills, perpetuating Reagan’s massive budget deficits.)

Reagan didn’t cut all taxes, however. He signed into law
increases in Social Security taxes on employees and employers, taking the tax from 7% to 7.65%. And he increased gas taxes by a nickel a gallon, raising an additional $3.3 billion in the first year. But these are taxes that effect working people not the rich.

So much for the idea that Reagan cut spending or otherwise was a fiscal conservative. Just more Reagan myths.

This post is too long already so I won’t go into any depth on the whole Iran-Contra thing (you can
read all the details here), other than to note that Reagan sold arms to Iran (which was against the law) and used the money to fund terrorists in Central America (which was also against the law). And it wasn’t like this was some kind of rogue operation run out of the CIA or the Pentagon. It was run out of the White House. But the cover up largely worked. Most of the relevant documents (including a presidential covert action finding signed by Reagan authorizing the sale of weapons to Iran) were destroyed. Most of the key players (including Reagan’s secretary of defense and national security advisor) were subsequently pardoned by George H.W. Bush. And some of those convicted of felonies in conjunction with the Iran-Contra affair (like Elliott Abrams and John Poindexter) even turned up later in the administration of George W. Bush. Just one observation: How do think it would have gone over with the wingnuts had it been a Democratic president who illegally sold arms to the Islamic Republic of Iran?

A final Reagan myth that we might as well refute is the idea that Reagan was a uniquely popular president. Compared to George W. Bush, sure. But, to quote
Paul Krugman:

A number of news sources have already proclaimed Mr. Reagan the most popular president of modern times. In fact, though Mr. Reagan was very popular in 1984 and 1985, he spent the latter part of his presidency under the shadow of the Iran-Contra scandal. Bill Clinton had a slightly higher average Gallup approval rating, and a much higher rating during his last two years in office.
You can’t blame Republicans for wanting to mythologize Reagan. After all, what’s the alternative? Nixon? But that doesn’t mean the rest of us have to accept those myths unchallenged.

UPDATE: A good op-ed from the Boston Globe, “Who Ended the Cold War?

1 comment:

Christian Fulghum said...

Right on, Mr. Daggatt!