In between tax preparation, financial news, deadlines with the Treasury and my son’s college search, I read an article in the September 24th issue of Newsweek by Andrew Sullivan. In the article, Mr. Sullivan likens Barack Obama’s effect for liberals as similar to Ronald Reagan’s for conservatives. At first, the idea seemed farfetched, but the more I thought about it, the more wisdom I found in the statement.
Of course the analysis is only valid, if President Obama wins a second term as President. Whether you like Barack Obama or hate him, he is poised to become a 2 term president, assuming his debate performance improves. With a second term, he is very likely to accomplish enough changes and major legislation to shape America to his vision just as Ronald Reagan did almost 30 years ago.
If you remember, under Reagan’s watch the US experienced one of the worst recessions ever with interest rates peaking around 18% and unemployment hitting an excess of 10%. At the time, the country was just recovering from the worst of the recession and tax rates were dropping from a high of 70% on unearned income to an eventual low of 28%. He missed the mark on downsizing the government which grew under his administration, but most contemporaries forget that part of his legacy. Reagan also presided over the collapse of the Soviet Union, the rise and temporary domination of Japanese businesses over US companies and he set the tone for a conservative nostalgic view of his second term. He issued famous sound bites such as “The government was not the solution but part of the problem” and “Trust, but verify” when dealing with Communist. He started the “no new tax” regime and gave up on downsizing government which led to great deficits. He struck a grand bargain with Tip O’Neal on Social Security, which kept it solvent for another 25 years or so and shaped government in many respects to his image.
We do not have any modern Republican presidents who have shaped America in a manner similar to Reagan during the last 50 years. As for the Democrats, two come to mind that fell short. Lyndon B. Johnson’s presidency saw the creation of the “Great Society”: the formation of Medicare, Medicaid, an expansion of welfare and the Vietnam War. The Johnson administration made great strides in helping minorities, yet all of those initiatives which did shape society for 20 years, are overshadowed by the War in Vietnam, which caused divisions in our society, huge deficits and subsequent economic failures that followed. William Jefferson Clinton, although he was president during one of the greatest wealth building decades in American history, has few initiatives that are memorable except for “Don’t Ask, Don’t Tell” in the military. As such, his presidency does not have the society shaping force Reagan’s did.
Obama came into office with the economy in free fall from the excesses of prior administrations and poor handling of the crisis by Treasury Secretary Hank Paulson. Jobs evaporated in the aftermath and that allowed the president to set up a stimulus package. Unfortunately, most of the money went to resuscitate state and local governments, rather than stimulate the economy. While the economy has been slow to recover the President remarked in his Inaugural Address “the challenges we face are real, they are serious, and they are many. They will not be met easily or in a short span of time.” There is a great deal of truth to this and if Obama does get reelected, time will tell whether his legacy will be akin to Ronald Reagan or Lyndon B. Johnson.
