It seems fitting that Ronald Reagan’s ninety-eighth birthday, on February 6, coincided with the Senate Republican effort to stonewall President Obama’s economic-stimulus plan. Doomed to failure in a key cloture vote after a trio of moderates pledged support for a compromise plan, GOP senators nevertheless thronged to deliver droning denunciations of the package before the c-span cameras. Government spending couldn’t alleviate the downturn in the economy, they intoned, since, after all, the New Deal hadn’t alleviated the Great Depression; the nation’s mobilization for World War II had proved the real stimulus needed to put the Depression to rest.
Never mind, of course, that the selfsame mobilization was an orgy of government spending. The lawmakers were clumsily telling a big lie of the sort Reagan himself had specialized in: In fact, the New Deal dramatically revived the moribund ’30s economy, and it was only FDR’s misguided bid to balance the budget—the very course of action Senate Republicans now seemed to endorse—that caused the 1937 recession-within-the-Depression that the GOP solons cited as definitive evidence of the New Deal’s failure.
As William Kleinknecht makes plain in his clear-eyed jeremiad, The Man Who Sold the World, this desperate, threadbare fiction is one among many fallacies attached to the myth of Reagan’s presidential greatness. The New Deal and its forerunner the Progressive movement, he observes, hewed to “the principles of the Enlightenment, the idea of a society based on reason and democracy.” Whereas the legion of Reagan-minted untruths about our public life “replaced Enlightenment thinking with a corrupted romanticism that portrays free-market purism as an article of religious faith.”
Of course, Reagan’s own perception of his role was nowhere near so self-aware or high-flown; he put himself forward as a purveyor of folksy home truths who prized entrepreneurship and individual character above the runaway excesses of the free-spending, big-government liberal agenda. In reality, he was an aphorist-for-hire, beginning political life as a New Deal liberal, then turning FBI informant during his anti-Communist tenure at the head of the Screen Actors Guild and alighting in the twilight of his film career on a lucrative gig as General Electric spokesman. Small wonder that anyone who sought intimacy with the man was put off by his curiously detached mien and his gift for shifting protective coloration. One former Hollywood girlfriend reported, “[I] always had the feeling that I was with him, but he wasn’t with me,” Kleinknecht notes. That protean unknowability became political gold in the hands of GE and the new breed of government-bashing Sunbelt millionaire that launched Reagan on the path to political power.
Kleinknecht confines his study mainly to the economic features of the Reagan revolution—the contempt Reagan and his allies showered on the poor, the open deceptions of the supply-side ethos, and the lionization of selfishness and greed. Such innovations are— or should be—bywords for anyone reckoning with the character of Reagan’s legacy. But Kleinknecht does the invaluable service of tracking such precepts through their application to the inner workings of government. Take, for example, Reagan’s dismantling of the modern regulatory state. Applied to pharmaceutical policy, this particular pro-business crusade prompted a reversal of a planned HHS-FDA aspirin warning label, producing the deaths of 1,470 children sick with the flu or chicken pox but otherwise healthy, who contracted Reye’s syndrome via unmonitored dosages. Meanwhile, Housing and Urban Development housing subsidies—an initiative the president opposed on ideological grounds—became a tributary of open graft, as Samuel Pierce, the department’s secretary and the administration’s token African-American appointment, turned over most policy decisions to an inexperienced socialite named Deborah Gore Dean, who tapped the agency’s budget for shopping sprees and bar tabs.
But of course, the deepest damage wrought by Reagan’s band of ideology-first administrators was in macroeconomic policy. OMB director David Stockman made major cuts in social programs on the flimsiest of pretexts, while Treasury secretary Donald Regan oversaw not simply the battery of tax cuts now synonymous with Reaganism but also the ruinous plan to deregulate the savings-and-loan industry, a speculative boondoggle that trashed financial, real estate, and farm values and cost taxpayers a cool $150 billion in bailout money.
Reagan’s financial-policy brain trust also jumpstarted efforts to repeal the 1933 Glass-Steagall Act, which prohibited commercial banking interests from branching out into conflict-ridden investment and insurance-underwriting schemes. As Kleinknecht notes, Reagan’s White House bypassed the Democratic Congress to issue a series of executive-branch dicta overturning key planks of the act—softening it up for its eventual repeal by the Clinton administration and the Republican Congress in 1999. The push was significant for a simple reason: “Without the repeal of Glass-Steagall and other aspects of financial deregulation in the post-Reagan era, the financial supermarkets like Merrill Lynch and Citicorp would never have been allowed to engage in the kind of reckless mortgage lending” that triggered the economic collapse of the past few years. In other words, even while Reagan’s empirically flawed policy outlook may be losing its footing at last, his poisonous economic legacy is very much with us— one of the many reasons Kleinknecht’s timely book serves as a crucial reminder of what we talk about when we talk about Reaganism.
Chris Lehmann is an editor of Bookforum.
