The impact of the Reagan presidency 1981-96 Flashcards
Which pre-Reagan events led to people looking back at the 70s as a bad time?
Loss of war for first time in Vietnam, Watergate and inability to fix economy and fuel shortages
What was Reagan’s view on TUs?
Hardline anti, as shown with sacking 12,000 air traffic controllers in 1981 who went on strike
How was business similar under Reagan as in the 20s?
Creation of monopolies, tax reductions of 75% to 25% for top rate, wealth concentrated at the top, more financial speculation and crashes, and rugged individualism where new industries grew (Gates and computing)
Why was the future an issue in the 1980 election?
As the majority of people saw their children’s future would be worse than their own, people liked Reagan’s personal campaign to bring back the good times rather than Carter’s all together campaign
What did Reagan do when entering the White House to show a rejection of government spending?
Sacked some White House employees, put a freeze on federal hiring and new office furnishings, told staff to cut travel expenses by 15% and set up a board reporting on how to cut down on big government
What was Reagan’s economic strategy called?
Program for Economic Recovery
What were the 4 tenets of Reagan’s economic policy?
Cutting federal deficit, reducing tax rates, deregulation and planned control of money supply
What was the name of Reagan’s first budget and what did it do?
Omnibus Reconciliation Act of 1981, cuts in Great Society reform package worth $35bn
What was the tax bill which Reagan passed and what did it do?
Economic Recovery Tax Act of 1981, income tax down 23% over 3 years, bands linked to inflation, with Independent Retirement Accounts (without tax) and business rates and taxes reduced, tax breaks offered businesses, in particular small and innovative
What were the desires of Reagan’s economic policy?
Stop inflation, reduce unemployment, increase personal wealth and productivity, more personal saving and investing, decrease federal spending
What did Reagan do with the Federal Reserve Board?
He encouraged them to tighten control on the money supply, which they did more than asked for, and then Reagan kept this set up even when employment rose
How did a tight monetary flow affect industry?
Increase in interest rates hurting companies that bought on credit or had long pay-back periods like construction, deepening the crash
Unemployment in 1980 and 1983
7.1% and 9.6%
What was inflation in 1980 and 1982
13.5% down to 6.2% and remained around 5% onwards
What is the historical debate on personal wealth?
Some see it as only helping richest, while others say it helped poorest most
How did productivity change in the first term of Reagan?
It went into the negative (both labour output and GNP) in 1982, before booming in 1983/4 and remaining more steady but strong after
How did saving and investing change under Reagan?
It was encouraged, but was put into a more dangerous place due to deregulation as show by savings and investment losses in late 1980s which FRB had to step in to control, with bankers lending to each other and reassuring the financial sector
Deficit and interest payments as a percentage of federal spending in 1980 and 1983
$59bn and 9% then $208bn and 14%
How did Congress cause issues for the deficit?
Planned cuts on welfare were watered down
How did Reagan change the human/defense spending set up?
Since the 60s and 70s defense budget was cut to increase human spending, but under Reagan 28% down to 22% on human and 23% up to 28% on defense
How did Bush affect spending policy?
He was less popular as smaller mandate and with Democratic Congress so was unable to carry on the spending cuts and of course no new taxes
How did Clinton act as a ‘New Democrat’ affected by Reagan/
Economy-focussed campaign (it’s the economy, stupid) with plans for low inflation, high unemployment, reduced deficit and no tariffs
Why was big government reductions supported?
New Federalism was supported by those who didn’t trust government and wanted it out of state and business interests
How many pages out of how many did Reagan cut from the Federal Register by 1982?
23,000 out of 87,000
What success of deregulation and reduction of big government did Reagan cite in 1982?
Reducing prices of petrol and heating, federal strike force had saved $2bn in 6 months and federal agencies turned to private sector with volunteer support
How did Reagan’s deregulation play the system well?
The small changes, while ineffectual, were seen by the population as key and insightful
How did Carter start deregulation?
Deregulation of airline as well as drafting laws on trucking, railway and finance deregulation
How did Reagan change deregulation?
It included working conditions and environmental deregulations
How did deregulation affect businesses of different sizes?
Small ones were bought up by larger ones, such as General Electric, which was able to decrease safety standards and, after a monopoly was reached, set prices and cut services (in particular rural)
When were Savings and Loan Institutions deregulated?
1983
Why were deregulations in the Savings and Loan institutions dangerous?
The people who ran them were used to safe, regulate rate of interest investments, while under deregulation they were able to make much riskier investments, many of which failed due to incompetence of the lender
What was passed in 1987 and 1989 to fix the S&Ls crisis?
Competitive Equality in Banking Act, and then FIRREA ending with $150bn bill
What was the result of a weakening dollar and no government investment on trade?
US went from world banker to a borrower, with imports rising as they were cheaper than the many closing industries (such as textiles) and US companies being bought by foreign investment
What was the upside and downside of foreign investment?
It gave consumers choice and made the US attractive for international trade and more investment, but the profits of investment were re-invested abroad
Example of successful and failed deregulation in Congress
Oil prices deregulated by Congress, but pollution and working conditions in nuclear power plants not
Why did the states not help deregulation?
They did not want to have to pay for services that would normally be under federal control, and often services collapsed, particularly with rural services for the poor (transport, communications, roads)
Example of Reagan regulation
Food Security Act of 1985, forced on him by Congress to federally aid farmers, the exception that proves the rule
How does the airline industry show the effects of deregulation?
From half-filled planes prior to de
tion, airlines started to having cramped planes going to less locations less often
Why is a widening gap between rich and poor not always a bad thing for Reagan?
He wished to asset a difference between the working poor and those who scrounged (like a black woman in Chicago he mentioned in speeches who used identity theft of dead Vietnam veterans for welfare)
How did OBRA affect the poor in terms of agencies?
Aid to Families with Dependent Children payments were capped or reduced often hurting working poor
How did welfare payment change under Reagan?
Workfare existed where a member of a family had to work in order to receive benefits (sometimes this was less than the benefit itself)
What did Reagan promise on with welfare but rarely deliver?
Childcare, so many parents couldn’t work, and also only state projects to be benefiting those who work which turned to those who are searching for work
How did Reagan change social housing?
The budget went from $32.2bn in 1978 to $9.2bn in 1988 which led to homelessness and a public reaction to this
How did Congress tackle homelessness?
1984 and 1987 bills, later being McKinney Act giving FEMA ability to half-half payments on state-chosen projects for the homeless, in particular transitional housing
How did Reagan affect the housing market?
Foreclosures quadruples and mortgage debt increased across the board
How did Reagan change leisure time?
It decreased with the drive towards productivity, as many were forced to work longer hours or at home
How did Reagan change part-time jobs?
They became more prevalent for mothers as the only way to have flexible employment in the competitive industry
How did wages change for new employees under Reagan?
A two-tier system was in place where older workers had higher wages while new ones, in particular the young, were paid less and with less benefits - still people took these jobs as they were non-negotiable and offered some job security
How did Reagan fail to support blacks?
His administration cared less, with the Civil Rights branch of the Justice Department filing less cases, removing affirmative action and cutting busing budgets, forcing segregation
How did Reagan fail to support Hispanics and inner city minorities?
Bilingual education budget dropped, with plan to have children learn English faster, and planned shrinkage continued
How did Reagan help and not help women?
Sandra Day as first female SC nominee, but not supporting Equal Rights Amendment or abortion
How is there disagreement over Reagan on AIDS and gays?
He ignored the epidemic until Rock Hudson died, a friend, but then from 1982 supplied money to research, but his conservative side were against gay friendly measures
What was the mentality of blacks under Reagan?
Feeling like quota filling, yet still not having affirmative action existing in face of conservative threat - rap music shows defeatist attitude
Why did the farming industry struggle under Reagan?
Wheat exports to USSR were cut in 1979, and high interest rates as well as 1983 drought
How did the public’s attitude change to farming under Reagan?
The rate of farm failures as shown in the films Country and The River of 1984 sparked interest in the problem such as 1985 Farm Aid Concert
Why was a lack of tariffs an issue for industry?
Places like Detroit could not compete with Japan as a car manufacturer due to the weak dollar
Which businesses grew under Reagan?
Service industries, defense sector and computers
Where were the success areas under Reagan?
Bi-costal boom, in particular in California where unemployment was low and the many who moved their felt that the policies had worked - similar to North Carolina financial industry
Where were the failure areas under Reagan?
Great Plains, were poor and remained so
How did Reagan change people’s overall view of the President as a place of hope?
The change he carried out in first years showed he was stronger than the past 3 presidents. and the Presidency was in some respects good
What was the failure of Reagan for himself?
Not carrying out all his New Right policies to the full, but this mattered less to the general public
How did Reagan keep popularity in his second term?
Projected a presidential image and foreign policy successes
How did Reagan’s legislative involvement change?
After early successes, he was blocked by a Democratic Congress and advised not to carry out religious right activities such as daily prayer - pragmatism
How did presidential action in the legislative change after Reagan?
Bush was a poorer communicator and had even less support in Congress, shown by raising taxes, while after Clinton was burned in healthcare the Presidency rarely returned so directly to legislative matters
When did the Iran-Contra affair break?
Autumn 1986
Why was the Iran-Contra affair damaging?
People were left wondering if a President who lied, or a President that couldn’t control his officials was worse
Why was the Iran-Contra affair not too damaging?
High level or popularity before compared to Nixon, idea of him post-operation so confused, and idea of him saving Iranian hostages by selling arms
Who supported New Right thinking at the start of the Reagan presidency?
A coalition of Republicans and Democrats supporting Liberal New Right and Conservative New Right
What was the paradox among voters about the poor?
They supported the New Right affirmation that they were exploiting the welfare system, but also felt they should help the poor
What shows the failure of New Right?
Hardline measures supported by Reagan were not passed by Congress, including New Federalism with roads built by states not fed
What was the failure of Republican thinking about the electorate?
They saw the swing towards them as a shift by the population to the New Right, while some say it was just a reaction to Democratic mistakes and they still supported a more fair US than the big businesses wanted
What was set up due to Democratic failures and what did it do?
Democratic Leadership Council, New Democrat and New Covenant ideas put forward from 1990 by chairman Clinton with lower taxes and welfare and federal involvement
How did business grow in government during Reagan?
More corporate events, such as sponsorship in sport and influencing politics with campaign contribution, buying airtime and making adverts more slick
How did Christianity change under Reagan in politics?
The religious right became more outspoken about issues such as abortion, but Reagan compromised by supporting them in rhetoric and not with legislation
How do the presidential debates show increases in political interest?
They increased for 1980 but fell through the 80s, increasing for 1992 and then plummeting in 1996
When was the best thing ever?
1979, Jerry Falwell creation of Moral Majority
When was Reagan shot at and what was the result?
March 1981, further popularity and Democrats impressed by this and his popularity passed his bills in 1981
Reagan on welfare
‘Safety net’ for ‘truly needy’
Inflation in 1983
Less than 2%
1986 Act on tax
Tax Reform Act, 14 bands down to 2, some saw 50% tax turn to 28%
How many jobs did the US create 1983-89?
18m
Agency deregulated by Reagan
Environment Protection Agency
Treaty of Reagan on nukes
Nuclear Force 1987 Treaty with Gorbachev, first of it’s kind
Reagan on defense spending
Defense is not a budget item. You spend what you need
De jure racism of administration
Black males fell further than any other group in wages and jobs in the 1980s, and only black Americans did not vote for him in a majority in 1984
Reagan on immigration
He did little to limit it
Facts on drugs
750,000 faced charges a year in 1980s, $15bn spent in 1988 on War on Drugs, seen as overtaking cold War by Reagan
3 reasons to politics survived Iran-Contra
Democrats did not desire to impeach popular President or reopen Watergate wounds, Pointdexter and North took blame, Americans saw it not as a crime of great issue
Popularity rating of Reagan in 1989
70%
Debt
Tripled
Long term effect of Reaganomics
In 1983 entered longest uninterrupted US growth in peacetime history - the tripling of debt was not a great problem at all
Mid-1990s richest Americans held how much wealth?
40%
