On November 4, 1980, the United States chose for its leader, Ronald Reagan, who strodeinto the White House promising smaller government, lower taxes, and less federalintrusion in people’s lives. He was the oldest man ever to serve as presidentof the United States.Yet his smile and rugged good looks projected the youthfulness of his days in Hollywood. When he spoke, there was the sweet voice and thefamiliar nod of the head that told America everything was fine. Then, he would tell a storyequipped with a moral.
It was the defining genius of Ronald Reagan tofind tales of hope and optimism to sustain his vision of a brand new America. His predecessor, Jimmy Carter, had spoken oflimits and the obligation to sacrifice. However, Reagan rejected that notion.After two decades of troubles that included assassinations and urban riots, theagony of Vietnam and the disgrace of Watergate, energy crises anddouble-digit inflation, the nation was ready for Reagan’s exhortation to”dream heroic dreams.” His feel-good conservatism embodied the 1980s—therestoration of pride and prosperity, but with little concern for pressingsocial and economic problems.
Reagan’s appealing surface simplicity concealed amultitude of contradictions. He championed a return to family values, though hewas the first divorced president in U.S. history and was estranged from several of hischildren.
He cultivated fundamentalist Christians of the new religious right,calling for “a spiritual revival, a return to a belief in moral absolutes,”but seldom attended church. He preached old-fashioned habits of work and productivitywhile maintaining a relaxed, hands-off management style and getting more sleep thanany president since Calvin Coolidge. Not the least of Reagan’sappeal was the straightforward simplicity of his political agenda.
It washighly conservative and, in domestic matters, ran directly counter to nearlyhalf a century of liberal policies. He declared, “We must balance thebudget, reduce tax rates, and restore our defenses.” He also advocated”getting the government off people’s backs” by reducing federalregulations on the environment and business. Reagan had hated high income taxes ever since hisbig-pay Hollywood days, when the top rate was 91 percent. As apresidential candidate, he seized upon a tax-cutting scheme called supply-sideeconomics. According to this plan, tax reductions would stimulate the economyby providing incentives for investment, thereby generating so much growth—andhence new taxable income—that the government would actually gain revenue.
Critics labeled the idea “voodooeconomics,” a phrase coined, ironically, by Republican George Bush beforehe joined the Reagan ticket as vice presidential candidate. But in seven yearsReagan and the Democratic Congress slashed the highest tax rate on even therichest Americans from 70 percent to 28 percent. At the same time Reagan, denouncing the Soviet Union as the “evil empire,” pushed for thelargest peacetime military buildup in U.S. history. Annual defense spending ballooned fromless than $200 billion under Presidents Ford and Carter to nearly $300 billionin 1985. “America is back and standing tall,” he proudly saidof the newly strengthened armed forces. Reaganomics sparked the biggest bull market in thehistory of Wall Street.
Yet much of the financial frenzy had little to do withthe kind of entrepreneurship that Reagan envisioned. Instead of investing inresearch, capital development, and higher productivity, many businesspeoplechose to devote their energy to mergers and takeovers. Using huge sums ofborrowed money, corporate raiders bought out sound companies and then sold themoff piece-by-piece to pay creditors and squeeze out a quick profit—typically atthe cost of laid-off workers. In the movie WallStreet, the character named Gordon Gekko captured the new morality when hesaid, “Greed is good. Greed is right.
” Those who had it were expectedto flaunt it. When Nancy Reagan decided the White House needed new china, shebought $200,000 worth, with private donations. Sales of stretch limousinesdoubled every year during Reagan’s first term. Demographers identified a newclass of society infatuated with wealth and material possessions.
These were mostlythe yuppies, which was a word used to identify “young urban professionals”.Yuppies of both sexes ate “power lunches” and “dressed forsuccess” by “wearing power suits”. Hard-driving overachievers,they worked out in trendy health clubs while working on their MBA degree, whichostensibly stood for master of business administration, but was widely held tomean “Making It Big in America.” Shopping malls became the symbol for Americanmaterialism, and they shopped for new technology like microwaves, VCRs, and cordlessphones that relied on the fingernail-size microprocessor chips that transformedAmerican life. Transcending all of these new developments was the personal computer,which in the 1980s became a staple in homes and standard in every office.