what was the outcome of the reagan administrations decision to deregulate the banking industry?

From Common cold War to Culture Wars, 1980-2000

The Reagan Revolution

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Learning Objectives

By the end of this section, yous will exist able to:

• Explain Ronald Reagan's attitude towards government
• Discuss the Reagan administration'southward economical policies and their effects on the nation

Ronald Reagan entered the White House in 1981 with strongly conservative values but feel in moderate politics. He appealed to moderates and conservatives anxious about social change and the seeming loss of American power and influence on the world stage. Leading the so-called Reagan Revolution, he appealed to voters with the hope that the principles of conservatism could halt and revert the social and economic changes of the last generation. Reagan won the White House past citing big government and attempts at social reform as the trouble, not the solution. He was able to capture the political capital of an unsettled national mood and, in the process, helped fix an agenda and policies that would bear upon his successors and the political mural of the nation.

REAGAN'S Early CAREER

Although many of his movie roles and the persona he created for himself seemed to correspond traditional values, Reagan'southward rising to the presidency was an unusual transition from popular cultural significance to political success. Born and raised in the Midwest, he moved to California in 1937 to become a Hollywood actor. He too became a reserve officer in the U.Southward. Ground forces that same yr, but when the country entered World War II, he was excluded from agile duty overseas because of poor eyesight and spent the state of war in the army's First Motion Flick Unit. After the war, he resumed his film career; rose to leadership in the Screen Actors Guild, a Hollywood union; and became a spokesman for Full general Electrical and the host of a television series that the company sponsored. As a young human, he identified politically as a liberal Democrat, but his distaste for communism, along with the influence of the social bourgeois values of his 2nd wife, actress Nancy Davis, edged him closer to conservative Republicanism ([link]). By 1962, he had formally switched political parties, and in 1964, he actively campaigned for the Republican presidential nominee Barry Goldwater.

In 1961, when Congress began to explore nationwide health insurance for the elderly under Social Security, Reagan made a recording for the American Medical Association in which he denounced the thought—which was afterwards adopted as Medicare—as "socialized medicine." Such a program, Reagan warned his listeners, was the first step to the nation'south demise every bit a free society.

Reagan launched his own political career in 1966 when he successfully ran for governor of California. His opponent was the incumbent Pat Brown, a liberal Democrat who had already served two terms. Reagan, quite undeservedly, blamed Brownish for race riots in California and educatee protests at the Academy of California at Berkeley. He criticized the Autonomous incumbent's increases in taxes and state government, and denounced "big government" and the inequities of taxation in favor of free enterprise. As governor, however, he speedily learned that federal and state laws prohibited the elimination of sure programs and that many programs benefited his constituents. He ended upward approval the largest budget in the state's history and approved revenue enhancement increases on a number of occasions. The contrast between Reagan'southward rhetoric and practice fabricated up his political skill: capturing the public mood and catering to it, but compromising when necessary.

REPUBLICANS BACK IN THE WHITE Business firm

Afterward 2 unsuccessful Republican main bids in 1968 and 1976, Reagan won the presidency in 1980. His victory was the issue of a combination of dissatisfaction with the presidential leadership of Gerald Ford and Jimmy Carter in the 1970s and the growth of the New Right. This group of bourgeois Americans included many very wealthy fiscal supporters and emerged in the wake of the social reforms and cultural changes of the 1960s and 1970s. Many were evangelical Christians, like those who joined Jerry Falwell's Moral Bulk, and opposed the legalization of abortion, the feminist movement, and sex education in public schools. Reagan likewise attracted people, often dubbed neoconservatives, who would non previously have voted for the same candidate equally bourgeois Protestants did. Many were eye- and working-class people who resented the growth of federal and state governments, particularly benefit programs, and the subsequent increment in taxes during the late 1960s and 1970s. They favored the tax revolts that swept the nation in the late 1970s nether the leadership of predominantly older, white, heart-class Americans, which had succeeded in imposing radical reductions in local belongings and country income taxes.

Voter turnout reflected this new conservative swing, which not only swept Reagan into the White House but created a Republican majority in the Senate. Merely 52 percentage of eligible voters went to the polls in 1980, the lowest turnout for a presidential election since 1948. Those who did cast a ballot were older, whiter, and wealthier than those who did not vote ([link]). Strong support amongst white voters, those over forty-five years of historic period, and those with incomes over $50,000 proved crucial for Reagan's victory.

Ronald Reagan campaigns for the presidency with his wife Nancy in South Carolina in 1980. Reagan won in all the Deep South states except Georgia, although he did not come from the South and his opponent Jimmy Carter did.

REAGANOMICS

Reagan's primary goal upon taking office was to stimulate the sagging economy while simultaneously cutting both regime programs and taxes. His economic policies, called Reaganomics by the press, were based on a theory called supply-side economics, about which many economists were skeptical. Influenced by economist Arthur Laffer of the Academy of Southern California, Reagan cutting income taxes for those at the top of the economic ladder, which was supposed to motivate the rich to invest in businesses, factories, and the stock market in apprehension of high returns. According to Laffer's argument, this would somewhen translate into more jobs further down the socioeconomic ladder. Economic growth would likewise increase the total tax acquirement—even at a lower tax rate. In other words, proponents of "trickle-down economics" promised to cut taxes and residue the budget at the same fourth dimension. Reaganomics also included the deregulation of industry and higher involvement rates to control inflation, but these initiatives preceded Reagan and were conceived in the Carter assistants.

Many politicians, including Republicans, were wary of Reagan's economic program; even his eventual vice president, George H. W. Bush, had referred to information technology as "voodoo economic science" when competing with him for the Republican presidential nomination. When Reagan proposed a thirty pct cut in taxes to be phased in over his first term in function, Congress balked. Opponents argued that the revenue enhancement cuts would do good the rich and not the poor, who needed help the most. In response, Reagan presented his plan direct to the people ([link]).

Ronald Reagan outlines his plan for revenue enhancement reduction legislation in July 1981. Data suggest that the supply-side policies of the 1980s actually produced less investment, slightly slower growth, and a greater decline in wages than the not–supply side policies of the 1990s.

Reagan was an articulate spokesman for his political perspectives and was able to garner support for his policies. Oft called "The Nifty Communicator," he was noted for his ability, honed through years as an role player and spokesperson, to convey a mixture of folksy wisdom, empathy, and concern while taking humorous digs at his opponents. Indeed, listening to Reagan speak frequently felt similar hearing a favorite uncle retrieve stories about the "good erstwhile days" earlier big government, expensive social programs, and greedy politicians destroyed the state ([link]). Americans found this rhetorical style extremely compelling. Public support for the program, combined with a surge in the president'southward popularity after he survived an bump-off attempt in March 1981, swayed Congress, including many Democrats. On July 29, 1981, Congress passed the Economical Recovery Tax Act, which phased in a 25 pct overall reduction in taxes over a catamenia of three years.

President Ronald Reagan signs economic reform legislation at his ranch in California. Annotation the blue jeans, denim jacket, and cowboy boots he wears.

Richard V. Allen on the Assassination Attempt on Ronald Reagan

On March 30, 1981, just months into the Reagan presidency, John Hinckley, Jr. attempted to assassinate the president every bit he left a speaking appointment at the Washington Hilton Hotel. Hinckley wounded Reagan and three others in the attempt. Here, National Security Adviser Richard V. Allen recalls what happened the day President Reagan was shot:

Past two:52 PM I arrived at the White House and went to [Main of Staff James] Baker's office . . . and we placed a call to Vice President George H. W. Bush. . . .

[W]eastward sent a message with the few facts nosotros knew: the bullets had been fired and press secretary Jim Brady had been hit, every bit had a Secret Service amanuensis and a DC policeman. At offset, the President was thought to be unscathed.

Jerry Parr, the Secret Service Item Chief, shoved the President into the limousine, codenamed "Stagecoach," and slammed the doors shut. The driver sped off. Headed back to the safety of the White House, Parr noticed that the red blood at the President'south oral fissure was frothy, indicating an internal injury, and of a sudden switched the route to the hospital. . . . Parr saved the President's life. He had lost a serious quantity of blood internally and reached [the emergency room] merely in time. . . .

Though the President never lost his sense of sense of humor throughout, and had actually walked into the hospital under his own power before his knees buckled, his condition became grave.

Why do you think Allen mentions the president's sense of sense of humor and his ability to walk into the hospital on his own? Why might the assassination attempt have helped Reagan achieve some of his political goals, such equally getting his tax cuts through Congress?

The largest of the presidential libraries, the Ronald Reagan Presidential Library contains Reagan's most important speeches and pictures of Ronald and Nancy Reagan.

Reagan was successful at cutting taxes, only he failed to reduce government spending. Although he had long warned nearly the dangers of big government, he created a new chiffonier-level agency, the Department of Veterans Affairs, and the number of federal employees increased during his time in office. He allocated a smaller share of the federal budget to antipoverty programs similar Aid to Families with Dependent Children (AFDC), food stamps, rent subsidies, job training programs, and Medicaid, only Social Security and Medicare entitlements, from which his supporters benefited, were left largely untouched except for an increase in payroll taxes to pay for them. Indeed, in 1983, Reagan agreed to a compromise with the Democrats in Congress on a $165 billion injection of funds to save Social Security, which included this payroll taxation increment.

Only Reagan seemed less flexible when it came to deregulating manufacture and weakening the ability of labor unions. Banks and savings and loan associations were deregulated. Pollution control was enforced less strictly by the Environmental Protection Agency, and restrictions on logging and drilling for oil on public lands were relaxed. Believing the free market was self-regulating, the Reagan assistants had little apply for labor unions, and in 1981, the president fired twelve chiliad federal air traffic controllers who had gone on strike to secure better working conditions (which would likewise have improved the public'southward safety). His activeness effectively destroyed the Professional Air Traffic Controllers Organization (PATCO) and ushered in a new era of labor relations in which, post-obit his case, employers simply replaced hit workers. The weakening of unions contributed to the leveling off of existent wages for the average American family unit during the 1980s.

Reagan's economic policymakers succeeded in breaking the cycle of stagflation that had been plaguing the nation, but at pregnant cost. In its effort to adjourn high inflation with dramatically increased involvement rates, the Federal Reserve also triggered a deep recession. Aggrandizement did drib, merely borrowing became expensive and consumers spent less. In Reagan's first years in office, bankruptcies increased and unemployment reached about 10 percent, its highest level since the Great Depression. Homelessness became a significant problem in cities, a fact the president made lite of past suggesting that the press exaggerated the problem and that many homeless people chose to live on the streets. Economic growth resumed in 1983 and gross domestic product grew at an average of iv.5 percent during the rest of his presidency. By the stop of Reagan's 2d term in part, unemployment had dropped to about 5.3 per centum, just the nation was nigh $3 trillion in debt. An increase in defence spending coupled with $3.6 billion in revenue enhancement relief for the 162,000 American families with incomes of $200,000 or more than made a counterbalanced budget, ane of the president'southward campaign promises in 1980, impossible to attain.

The Reagan years were a complicated era of social, economic, and political change, with many trends operating simultaneously and sometimes at cross-purposes. While many suffered, others prospered. The 1970s had been the era of the hippie, and Newsweek mag declared 1984 to be the "year of the Yuppie." Yuppies, whose name derived from "(y)oung, (u)rban (p)rofessionals," were akin to hippies in being immature people whose interests, values, and lifestyle influenced American civilisation, economy, and politics, just as the hippies' credo had done in the tardily 1960s and 1970s. Dissimilar hippies, notwithstanding, yuppies were materialistic and obsessed with image, comfort, and economic prosperity. Although liberal on some social problems, economically they were conservative. Ironically, some yuppies were former hippies or yippies, like Jerry Rubin, who gave upward his crusade confronting "the establishment" to go a businessman.

Read more about yuppie culture and then use the table of contents to admission other information about the culture of the 1980s.

Section Summary

After decades of liberalism and social reform, Ronald Reagan inverse the face of American politics by riding a groundswell of conservatism into the White Business firm. Reagan's superior rhetorical skills enabled him to gain widespread back up for his plans for the nation. Implementing a series of economical policies dubbed "Reaganomics," the president sought to stimulate the economic system while shrinking the size of the federal government and providing relief for the nation's wealthiest taxpayers. During his two terms in function, he cut spending on social programs, while increasing spending on defense. While Reagan was able to break the cycle of stagflation, his policies also triggered a recession, plunged the nation into a brief menstruation of significant unemployment, and made a counterbalanced budget incommunicable. In the cease, Reagan's policies macerated many Americans' quality of life while enabling more than affluent Americans—the "Yuppies" of the 1980s—to prosper.

Review Questions

Before becoming a conservative Republican, Ronald Reagan was ________.

a liberal Democrat

a Socialist

politically blah

a Herbert Hoover Republican

A

The conventionalities that cutting taxes for the rich will eventually result in economic benefits for the poor is commonly referred to every bit ________.

socialism

pork butt politics

Keynesian economics

trickle-downward economics

D

What were the elements of Ronald Reagan's program for economical reform?

Reagan planned to cut taxes for the wealthy in the promise that these taxpayers would and so invest their surplus money in business; this, Reagan believed, would reduce unemployment. Reagan also sought to raise interest rates to adjourn inflation, cut federal spending on social programs, and deregulate industry. Finally, Reagan hoped—just ultimately failed—to residual the federal budget.

Glossary

New Right

a loose coalition of American conservatives, consisting primarily of wealthy businesspeople and evangelical Christians, which developed in response to social changes of the 1960s and 1970s

Reaganomics

Ronald Reagan'due south economical policy, which suggested that lowering taxes on the upper income brackets would stimulate investment and economic growth

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Source: http://pressbooks-dev.oer.hawaii.edu/ushistory/chapter/the-reagan-revolution/

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