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Thursday, June 14, 2018

REAGAN, TRUMP, AND THE UPSIDE OF AGE

A young Donald Trump meets President Ronald Reagan
By Michael Cook      

Much has been made of the fact that Donald Trump vanquished 16 challengers on his way to winning the 2016 Republican nomination. But scarcely anyone bothered to note at the time that Trump, aged 70, was the oldest among the many contenders.

There are plausible explanations for this inattention to Trump’s age. As a campaigner, Trump worked tirelessly, and scheduled more interviews and rallies than any of his younger rivals. Indeed, the man seemed never to sleep.

Then, too, the working press may have considered it somehow indelicate to focus on Trump’s age, given that the leading candidates for the Democrat Party’s nomination were just as old, or older.

Finally, it’s quite likely that the issue of age and the presidency had been settled several decades earlier, with the election, at age 69, of Ronald Reagan.

Perhaps it’s true: seventy is the new fifty. In any event, Ronald Reagan and Donald Trump are the two oldest men ever to have won the presidency.

Reagan and Trump share another circumstantial similarity: each came to power as an outsider, and followed in the wake of a failed presidency. The hapless Jimmy Carter, who preceded Reagan, preached a doctrine of resignation in the face of crippling stagflation. Trump’s predecessor, Barack Obama, exhorted the nation to accept and embrace a “new normal” consisting of low workforce participation and perpetually anemic GDP growth.

Neither Carter nor Obama believed sufficiently, if at all, in the idea of American Exceptionalism. Theirs were failures of both leadership and imagination.

Ronald Reagan, the Hollywood actor, always appreciated the power of imagination. He urged his fellow citizens to think of America in the way John Winthrop described it: as “a shining city on a hill.” Countering the despair and futility of the Carter years, Reagan assured Americans that the nation’s best days lay ahead.

Donald Trump, the builder, announced his firm determination to restore American greatness. And it is fitting that a builder should succeed the president who proclaimed – in one of his few memorable utterances – that “you didn’t build that.”

President Reagan’s advanced age, much remarked upon at the time, actually proved a great benefit to the nation, owing both to his personal experiences and to the things he learned (and did not learn) as a young man.

Reagan was born in 1911, in a small apartment situated above the local bank, on the main street of Tampico, a tiny town on the Illinois prairie. Reagan’s father Jack was a salesman, and the family moved often, always renting their homes, and always living in modest circumstances.

But easily the most prosperous period of Ronald Reagan’s youth took place in Dixon, Illinois, where the family landed in 1920. Jack Reagan had become a partner in a retail venture, the Fashion Boot Shop.

In his autobiography, Ronald Reagan recalls that it was in Dixon that “I learned to admire risk takers and entrepreneurs, be they farmers or small merchants, who went to work and took risks for themselves and their children, pushing the boundaries of their lives to make them better.”

If things seemed to be looking up for the Reagan family in Dixon, so too was the nation beginning to prosper under the administration of President Calvin Coolidge. Reagan entered Dixon High School in 1924, just as Coolidge was winning election to a second term.


President Calvin Coolidge
The Coolidge years proved to be one of the most dynamic periods of innovation and economic growth in American history. Coolidge and his treasury secretary, Andrew Mellon, implemented dramatic cuts to marginal income tax rates, and the resulting economic boom produced a near 50% increase in federal tax receipts (which Coolidge and Mellon used to pay down federal debt). During the Coolidge years, inflation averaged 1.5%, and unemployment averaged 3.0%. And Calvin Coolidge, a believer in limited government, actually reduced the size of the federal workforce.

The youthful Ronald Reagan must have been paying attention. Richard Reeves, in his President Reagan: The Triumph of Imagination, notes that Reagan would, as an adult, read Coolidge’s autobiography twice. And, following his inauguration in 1981, Reagan chose to display Coolidge’s portrait in the Cabinet meeting room. Members of the press seemed puzzled by this gesture; of course, few (if any) of them were old enough to have lived through the Coolidge presidency.

Following his graduation from Dixon High School, Ronald Reagan headed off to college. His college search was limited to one school, Eureka College, located a few hours south of Dixon, and operated by the Disciples of Christ, the denomination to which Reagan and his mother Nelle belonged.

In his autobiography, Reagan explains that “Eureka… is a Greek work that means I have found it, and it described perfectly the sense of discovery I felt the day I arrived there in the fall of 1928.”

As an economics major at Eureka College, one thing that Dutch Reagan would not discover was the work of John Maynard Keynes. Keynes’ General Theory did not appear until 1936, by which time Reagan was a college graduate working in Iowa as a radio broadcaster. (Radio, by the way, was among the most important technological innovations to emerge during the Coolidge years.)

Reagan studied classical economics at Eureka College, and his understanding of how markets operate would have been informed by Adam Smith’s “invisible hand” metaphor, rather than by Lord Keynes’ prescription that government should, whenever necessary, intervene in the economy to stimulate demand and thereby eliminate periodic recessions from the business cycle. As a student, Reagan missed out on the Keynesian revolution in economic thinking, and this is significant. As FDR proved in the 1930s, and as Obama would demonstrate 80 years later, Keynesian policies tend to prolong rather than eliminate recessionary conditions.

Ronald Reagan continued to study economics throughout his lifetime. The columnist Robert Novak interviewed Reagan at the White House in 1981 for the purpose of gaining insights into Reagan’s influences. The new president cited, among others, the nineteenth century political economist Frederic Bastiat, as well as members of the Austrian School, F.A. Hayek and Ludwig von Mises. Novak returned to his office following the interview and, after looking up Bastiat, remarked to his partner Rowland Evans that Reagan was actually more widely-read and better educated than they were.
 
During Reagan’s so-called “wilderness years” of the late 1970s, the free market economists of the Chicago School began their remarkable Nobel Prize winning streak. Milton Friedman, the most prominent among them, worked effectively to discredit Keynesian fiscal policy, and later assessed Keynes’ influence as “wholly bad.” It was an influence Ronald Reagan managed to avoid.

Reagan was doubtless aware of the ascendency of the Chicago School and, in fact, subsequently appointed George Schultz, a former dean of the University of Chicago Graduate School of Business, as his secretary of state.

Having witnessed the prosperity of the 1920s, and having studied economics in college prior to the advent of Keynesian theory, Ronald Reagan assumed the office of president particularly well-equipped to govern, in the 1980s, in such a way as to re-create the tremendous and sustained economic growth last experienced during the administration of Calvin Coolidge.

In 1946 Ronald Reagan was 35 years old and a major box office attraction in Hollywood. Across the country in New York City, Donald Trump was born into comfortable circumstances. His father Fred developed housing in the borough of Queens, where Donald grew up.

After attending a military boarding school, Trump enrolled in college – first at Fordham and then at Penn – to study business. He graduated from Penn’s Wharton School of Finance in 1968.

Whatever brand of economics Trump may have studied in college, it is probable that most of his training took place within the classroom of his father’s business, against the backdrop of New York City’s rough and tumble real estate market. But this much is certain: as a young man starting out in the business world, Donald Trump witnessed at first hand the calamitous circumstances of the New York City financial crisis of the mid-1970s.

Soon thereafter, in the wake of the Watergate scandal, the nation turned to Jimmy Carter, who promised to restore honesty and integrity to the presidency. Unfortunately, Carter appeared ill-equipped to deal with an ever-worsening economy – one that was characterized by runaway inflation, extremely high borrowing rates, stagnant growth, and severe energy shortages. In response to these miserable conditions, Carter admonished Americans to turn down their thermostats in winter, put on sweaters, and get used to lower living standards.

Meanwhile, Republicans in Congress began to attach tax reduction amendments to every new piece of legislation. All of these amendments (known as Kemp-Roth) were effectively killed until, in October of 1978, a bill that included one such amendment finally passed both houses of Congress. As Brian Domitrovic recounts in his history of the supply-side movement, Econoclasts, President Carter cancelled a weekend trip to Camp David in order to veto the legislation – thus precluding, in Domitrovic’s view, any chance of an economic recovery and any chance of Carter’s re-election in 1980.

Donald Trump celebrated his 30th birthday just a few months prior to Carter’s election in 1976. As someone whose business, real estate development, is especially sensitive to interest rates and the cost of capital, the mid- to late-1970s could not have been, for Trump, a period that inspired much confidence in government. It is therefore likely that Trump would have taken special note, in January of 1981, of a particular passage in Ronald Reagan’s inaugural address: “In the present crisis, government is not the solution to our problem; government is the problem.”

By 1986, Ronald Reagan had fully-implemented his supply-side program of tax cuts and regulatory relief, and Donald Trump, now aged 40, was both observing and participating in the tremendous economic expansion that Reaganomics engendered. But the view from his office window in Trump Tower troubled him. For six long years, New York City’s municipal government had been engaged in a seemingly futile effort to rebuild Central Park’s Wollman skating rink. With no end in sight, Trump issued a challenge to Mayor Ed Koch: Let me take over this project. I’ll complete it in six months. Or you can wait another six years.

After a bit of wrangling, Trump assumed responsibility for completing the project. He brought it in under budget. And it took him only five months.

Donald Trump’s public comments over the next 30 years would often point to what he characterized as the declining status of the United States within the world community, and to the ineptitude of the government officials who were responsible for America’s falling fortunes. When Trump at last decided to put himself forward as a candidate for president, it is clear that he took as his model the nation’s last great president, Ronald Reagan.

Recall that when Reagan challenged the incumbent president in 1980, his appeal to voters was simple and straightforward: “Let’s make America great again.” In 2016, Trump adopted Reagan’s appeal, but re-phrased it as an injunction: “Make America Great Again.” And it worked. Trump managed to re-assemble enough of the old Reagan Coalition to prevail over Hillary Clinton.

Thus far into his presidency, Donald Trump’s demeanor and tone recall the original outsider in American presidential politics, Andrew Jackson. It is obvious that Trump admires the fiery (and frequently tempestuous) Jackson, and a portrait of Old Hickory now hangs prominently in the Oval Office.

But consider for a moment what Donald Trump is actually doing as president – in terms of tax and regulatory policies, in terms of foreign affairs, and in terms of judicial appointments. All of this can be fairly and accurately characterized as Reaganesque.

In the cases of Ronald Reagan and Donald Trump, our two oldest presidents, age has played a fortuitous and crucial role. This is not to suggest that age alone sufficiently determines a politician’s preparedness to lead successfully. Hillary Clinton, for example, is just as old as Donald Trump, but she appears utterly unappreciative of the achievements of the Reagan presidency. (Indeed, in 2008 she berated her primary opponent, Barack Obama, for acknowledging the obvious fact that Reagan had been a “transformative” president.) And to the extent that one can divine her political principles, Hillary Clinton’s thinking appears to have been shaped primarily by Saul Alinsky, the subject of her college thesis (and more recently, perhaps, by Willie Sutton).

Occasionally, a bold leader will emerge from outside the established political order. Such a leader will help us to recall the better moments in our history, and to honor the statesmen who so ably presided over them. As Americans, we are fortunate that Ronald Reagan came along when he did, and that he was able to remind us of the achievements of President Calvin Coolidge. Today, we are similarly fortunate to have as president a man who remembers and seeks to emulate – programmatically if not stylistically – the great statesman Ronald Reagan.


Michael Cook is a friend of this blog and lives in Pittsburgh, Pennsylvania and Aiken, South Carolina.


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