Reagan's Revolution and the Urban Crisis

Reagan's Revolution

• Was it a revolution?
  • Fall of the "New Deal coalition."
    • Continuity: support for federal involvement in economic life, entitlement programs, and metropolitan infrastructure.
  • Democrats perceived as the "big government" party, solidified by civil rights and Great Society reforms.
    • Nixon's 1968 campaign used rhetoric similar to Goldwater and Wallace in the 1960s.
  • Rise of "rights" politics (gender, race, sexuality) due to successful protests.
  • Stagflation and de-industrialization impacted the economy.
• Carter's Presidency (pre-Reagan)
  • Carter won the 1976 election with only 50% of the vote, lacking a clear mandate; received less than half of the white vote.
  • Mixed record on civil rights enforcement; limited political support for federal role in rights for women and minorities.
  • Accelerated de-industrialization through deregulation, a 1978 cut in capital gains tax, and monetary policy.
  • The "Malaise" speech reflected the economic struggles.
• Reagan's Policies and Their Effects
  • Shift from "big government" as a solution to "big government" as a problem and "the market" as the solution.
  • Public policy since Carter, especially since 1980, generally benefited the affluent while creating challenges for the middle class and poor, with few exceptions.
• Income Inequality
  • Income and wealth inequality decreased significantly between World War II and the 1970s, when public policy supported a broad middle class.
  • Since the 1970s, inequality (the "wealth gap") has steadily increased.
  • In 2016:
    • Top 10% of Americans owned more of total U.S. wealth.
    • The next 40% owned less.
    • The bottom 50% saw its share of wealth shrink.
    • About 1 in 10 families had negative net worth.
  • Total U.S. household wealth in 2016: $86.87 trillion$
• Taxes and Supply-Side Economics
  • Theory: Cutting taxes for the wealthy would lead to investments and purchases that would "trickle down" and stimulate economic growth.
  • Practice: Between 1980 and 1986, four massive tax cuts were passed.
    • Example: A family with an income of $100,000$ gained about $8,400$ in extra income (8.4% tax break), while families making less than $10,000$ gained about $58$ (0.6% tax break).
  • Impact: Growth of jobs in high finance and services, luxury goods sales, and insecure, low-paying jobs (e.g., fast food, non-union manufacturing).
• Cuts to Social Services
  • Reagan and Bush administrations cut funding for:
    • Food stamps
    • Child nutrition programs
    • Job training programs
    • AFDC (Aid to Families with Dependent Children)
    • Public service employment
    • Low-income housing
  • Between 1980 and 1992, spending on social service programs fell:
    • 82% for subsidized housing
    • Over 60% for job training
  • Between 1980 and 1988, half a million working families, all headed by women, lost child-assistance benefits.
  • 70% of the cuts to food stamps came from families already living below the poverty line.
• Entitlements
  • Reagan and Bush administrations did not touch:
    • Social Security
    • Medicare (although the poorest recipients paid higher premiums)
    • Tax deduction for mortgage interest
  • Distinction drawn between "welfare" programs and "entitlement" programs.
  • Overall spending for entitlement programs grew due to the growth of Social Security, Medicare, and other programs targeting the middle class.
  • Reagan and Bush administrations spent more on redistributive programs than prior administrations, making government spending more influential by increasing benefits for the middle class while denying them to the poor.
• Deindustrialization and Deregulation
  • Attack on unions:
    • Broke PACO (Professional Air Traffic Controllers Organization) in 1981.
  • Monetary and fiscal policies + banking and stock market deregulation.
    • Triggered a big recession in 1982, further accelerating deindustrialization.
  • 1982:
    • 3,000 individual mass layoffs or plant closures
    • About 1.25 million blue-collar jobs lost
    • Unemployment reached 11% at the peak of the recession
  • Growth for some industries:
    • Speculative boom in commercial real estate, stocks, high-tech industries, luxury consumer goods, and high-end real estate.
    • Financial centers (L.A., NYC) and suburban "downtowns" boomed.
    • Big money in corporate consolidation (Business Week called it the “Casino Economy”).
    • Michael Milken made $550 million$ in fees for selling “junk bonds” in one year.
  • White-collar workers also affected by downsizing (e.g., 1985-6, Dupont laid off 11%, Exxon 17%, AT&T 10%).
  • Between 1970-1990, labor force participation of married women increased 60%, and teenage employment increased dramatically (in part because corporations marketed to them).
• Government Programs and Society
  • Government programs and the “Affluent Society”:
    • Military spending on the military, R&D, and infrastructure.
    • GI Bill, mortgage programs, FDIC, etc.
    • Safety net: Social Security, job protections.
  • Government programs and the “other” America:
    • Housing policy (Public Housing Administration, FHA, GI Bill).
    • Urban renewal policy and interstate construction.
    • Financial deregulation and capital flight.
    • Taft-Hartley and “right to work” states.
    • Limited support for Great Society programs (quickly defunded with escalation of the Vietnam War).
• Selling the Revolution
  • Fundamentalist/evangelical Christian vote:
    • Feminist and gay rights movements seen as a threat to the “traditional” heterosexual nuclear family (see Phyllis Schlafly, Anita Bryant, etc.).
    • By the late 70s, a political coalition of religious conservatives formed, in part by setting aside differences with Catholics on abortion.
    • 1976: GOP congressman Henry Hyde (Illinois) successfully banned the use of Medicaid funds for abortions (the “Hyde Amendment”).
    • National Pro-Life Action Committee (NPLPAC) and other pro-life groups raised the profile of abortion as a campaign issue; by the decade’s end, successfully defeated key Senate Democrats who had supported new liberal initiatives (abortion access, Title IX, etc.).
    • 1977: Dr. James Dobson founded Focus on the Family (campaigns against sex education in schools and LGBTQ rights).
    • 1977: Rev. Pat Robertson created the Christian Broadcasting Network (CBN) and hosted The 700 Club.
    • Birth of “televangelism” that soon transformed mass media landscape (Jim and Tammy Gaye Bakker’s Trinity Broadcasting Network follows).
    • 1979: Rev. Jerry Falwell founded The Moral Majority (coalition of conservative religion organizations).
    • Called abortion “America’s national sin” and the ERA a “definite violation of Holy Scripture”; campaigned against gay rights (supported Briggs Initiative and called the murder of Harvey Milk and Mayor George Moscone an act of God’s judgment against LGBTQ people and the movement).
  • Painted Democrats as a “tax and spend” party, as weak on defense and crime; promised to get the government “off our backs.”
  • The “urban crisis” and threat to the middle-class suburban ideal at the symbolic (and material) core of appeal to the “silent majority.”
  • Republicans on civil rights: EEOC; blamed “welfare queens” for inner-city black poverty; “Willie Horton” campaign (legacy of Nixon’s “tough on crime,” “law and order” rhetoric).
  • Electoral results:
    • Secured votes of the self-described “middle class” (in 1980, Reagan captured the vote of ½ of blue-collar workers, including more than 40% of union households; increased white working-class vote in 1984).
    • GOP attracted a sizable fundamentalist Christian vote.
    • 1980: Reagan secured the vote of ½ of blue-collar workers, including more than 40% of union households (these are former “New Deal coalition” voters); and increased white working-class support in 1984, after establishing his anti-union credentials.
• Electoral Shifts
  • 1980: Reagan beat Carter by 10% of the popular vote, with an electoral landslide (489 to 49); Republicans recaptured the Senate (first time since 1955).
  • 1984: Reagan won every state but Minnesota and D.C.. . . . . . and it’s the beginning of a seismic shift in American electoral politics:
    • 1988: Bush (Sr.) beat Dukakis
    • 1992: Clinton won (barely) without a clear mandate
    • 1994: Gingrich and Republicans retook the House of Representatives
• Wealth Gap in the 1980s
  • The income of the richest 5th of the population rose by 1/3, and that of the top 1% doubled.
  • The total income of the bottom 60% of Americans fell in real dollars.
  • For at least 2/3 of the nation’s working families, the 1980s saw their taxes rise and their standard of living decline.
  • By the time Clinton was elected in 1992, 1/3 of all working Americans were technically living below the poverty line.