A balanced program for tax reform based upon the common sense idea of lowering taxes out of surplus revenues… Andrew Mellon


That very common sense approach by the secretary of the treasury who issued the bon mot, Gentlemen prefer bonds, was the underlying idea behind Reaganomics and he sought to implement it the same way that both Coolidge and Hoover did by following more of Mellon’s advice to, give tax breaks to large corporations, so that money can trickle down to the general public, in the form of extra jobs. The problem with the application of the theory is that there were no surplus revenues – Wilson had destroyed the possibility for his successors with World War I and FDR had destroyed the possibility forever with the New Deal and World War II. But what Reagan could – and did – achieve was to prolong the growth phase of the business cycle by lowering the threat of inflation and that meant prosperity for the nation. As Mellon said, strong men have sound ideas and the force to make these ideas effective, unfortunately the quarter of a century of mental and moral weaklings who have occupied the office since haven’t had a sound idea between them and the sum total of their bad ideas from free trade to socialized medicine will make it that much more difficult for anyone to make any sort of sound idea effective.

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The Reagan effect : economics and presidential leadership  John W. Sloan  Lawrence, Kan. : University Press of Kansas, c 1999  Hardcover. 1st ed. and printing.      xi, 311 p. ; 24 cm. Includes bibliographical references (p. 271-297) and index. Clean, tight and strong binding with clean dust jacket. No highlighting, underlining or marginalia in text. VG/VG

His message was simple, repeated almost like a mantra: cut taxes, cut spending, reduce bureaucracy, deregulate. His followers saw him as a conservative revolutionary; his detractors saw him as Mr. Magoo. Now that Reagan‘s achievements have become more obvious, it is time for a new nonpartisan appraisal of his leadership and its impact on the nation. That is precisely what John Sloan delivers.

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Sloan focuses especially on the questions raised in the highly polemical debates between conservatives and liberals concerning Reagan’s economic policies. He gives equal time to both sides, showing how liberals were wrong in their predictions of gloom, while conservatives continue to grant Reagan the credit and status than he deserves.

The Reagan Effect reveals how the failures of the Carter administration set the stage for Reagan’s success, describes how he united diverse conservative factions, and shows how Reagan’s personality affected his decision-making style. In examining the economic record, it explains how Reagan persuaded Congress to pass budget and tax cuts while funding a costly defense buildup, and it analyzes the construction of a policy regime that prolonged the growth phase of the business cycle by lowering the threat of inflation. It also provides fresh insights into the Bush administration’s responsibility for the savings and loan disaster and tells how it dealt with trade imbalances.

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The political success of Reagan’s presidency, observes Sloan, can largely be attributed to the combined efforts of conservatives and pragmatists. Reagan was a populist, a former actor who knew how to deliver his message in a way that pleased his audiences and who never allowed liberal assumptions to undermine his convictions. Sloan stresses that Reagan’s rhetoric functioned to keep conservatives loyal while achieving pragmatic compromises.

Sloan suggests that the net effects of Reagan’s presidency were positive. He observes that effective government – such as relying on the Federal Reserve to control inflation – was an essential component in Reagan’s leadership, thus contradicting the antigovernment stance of many conservatives. Sloan concludes that Reagan’s impact, as opposed to his rhetoric, was not to displace liberalism but to weld conservatism to it, and that while he did not stop big government he gave the nation a pause from its worst excesses and a vision of how it could be tamed.

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