Obama in Reagan's shadow

Shrum proclaims “end times” for Reaganism. Wise Democrats will want to handle that prediction with care.

If the chapter is closing on the Reagan era in U.S. politics—and I think it is—it is not closing because Reaganism has been repudiated (as Shrum would wish). It is closing because Reaganism has been accepted and digested.

A little history.

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In the years after 1965, a generation of bold liberal politicians tried to out-Roosevelt Franklin Roosevelt. With the federal treasury overflowing from the 1960s boom, they launched huge new spending programs like Lyndon Johnson’s Medicare, Medicaid, and the War on Poverty.

These liberals quickly discovered that they had been over-optimistic. The programs they had launched cost much more than expected—and a slowing economy yielded much less revenue than expected. Jolted by inflation, energy shortages, and other crises, politicians began to interfere more and more in the innermost workings of the economy: freezing prices and managing industries. It didn’t work, and the dominant liberalism of the years 1930-1965 began to unravel. Ironically enough, the most extreme of these interventionists was Richard Nixon—the conservative’s conservative on cultural issues, but very much an adherent of the postwar consensus on economic issues.

The unraveling was accelerated by the social disintegration that set in after 1965. Crime, family breakup and urban decay at home and weakness in the face of Soviet provocations abroad all took their toll. As Jonathan Rieder wistfully observed in his famous 1975 anthropological study of the Jewish and Italian-American voters of the Canarsie neighborhood of New York City, the word “liberalism” had come to acquire connotations of “profligacy, spinelessness, malevolence, masochism, elitism, fantasy, anarchy, idealism, softness, irresponsibility, and sanctimoniousness.”

The collapse of liberalism brought Reagan to power. Indeed, the turnaround began even before his election, as neoclassical economics began to win converts even among some Democrats. Gerald Ford launched the deregulation of the economy by repealing New Deal controls on gold ownership and stockbrokers’ fees. After suffering losses in the congressional elections of 1978, Democrats in Congress joined Republicans in deregulating transportation industries. Congress compelled a reluctant Jimmy Carter to pave the way for deregulation of the prices of oil and natural gas (which Reagan would accelerate in 1981).

When Reagan arrived in Washington, he cut taxes, supported the Federal Reserve in its anti-inflation struggle, revised labor laws to restrain the excessive power of trade unions, and generally set a tone reassuring to business and investment. His actions were matched by ideological cognates around the world: Margaret Thatcher in Britain, Brian Mulroney in Canada, and Helmut Kohl in Germany. In true tribute to their success, they were eventually imitated, in part, even by left-of-center parties in Australia, New Zealand, France, and elsewhere.

In the 1990s, conservative Republicans in Congress and the states launched a new wave of reforms. Their crime control and welfare reform programs curbed and corrected harms bequeathed by the social engineers of the 1960s.

Now notice what Reagan and his successors did not do. They did not abolish wholesale New Deal—or even Great Society—programs. Medicaid and Medicare remain in business. They did not repudiate Franklin Roosevelt; indeed Reagan always presented himself as a fulfillment of Roosevelt’s vision. They set limits on liberalism: thus far and no farther.

The Reagan Revolution bookended the New Deal. It did not repeal it. Not all of Reagan’s heirs were so modest, and they usually paid a political price for it. It took him some time, but Bill Clinton made his peace with the legacy of Reagan. He signed welfare reform, accepted balanced budgets, acceded to a cut in the capital gains tax. Just as President Eisenhower accommodated himself to his gigantic liberal predecessor, FDR, so Clinton accommodated himself to Reagan.

Now it is Obama’s turn. He can try (as Shrum recommends) to overthrow the Reagan legacy, to establish himself as a new historical bookend, hurling himself into the kind of great campaign for economic redistribution hinted at by his own early rhetoric. If he does, his career will likely be tumultuous and ultimately doomed. This remains a basically conservative country.

Or Obama can fit himself into the American story, seeking continuity with all that came before, accepting institutional limits on his actions, innovating by inches. That may disappoint his most ardent followers, who long for a second coming of FDR. But it will emulate his wisest predecessors.