Regans Economic Strategy and Policy - Essay Example

1 Reagan Evaluate Regan's Economic strategy and policy, especially 1981-82 Ronald Reagan's major focus during his first term was reviving the economy his administration inherited, which was plagued by a new phenomenon known as stagflation (a stagnant economy combined with high inflation). His administration fought double- digit inflation by supporting Federal Reserve Board Chairman Paul Volcker's decision to tighten the money supply by dramatically hiking interest rates. Economist Milton Friedman said, "Reagan understood that there was no way of ending inflation without monetary restraint and a temporary recession". (Friedman) Friedman feels there were three key elements inherent in Reagan's fiscal policy. Which was primarily designed to curb social spending and increase defense spending. Reagan according to Friedman, accomplished this in three ways: (1) by slashing tax rates and so cutting Congress's allowance. (2) by being willing to take a severe recession to end inflation. In the opinion of Friedman, no other post-war president would have been willing to back the Volcker Fed in its tough stance in 1981-82. I can testify from personal knowledge that Reagan knew what he was doing. He understood that there was no way of ending inflation without monetary restraint and a temporary recession. As in every area, he stuck to his guns and looked to the long term. (3) and in some ways the least recognized, by attacking government regulations. The federal Register records the thousands of detailed rules and regulations that federal agencies churn out in the course of a year. They are not laws and yet they have the effect 2 of laws and like laws impose costs and restrain activities. Here too, the period before President Reagan was one of galloping socialism. The Reagan years were ones of retreating socialism, and the post Reagan years, of creeping socialism" (Friedman) While Reagan had his supporters among trained economist like Friedman, the American public and his detractors did not have such a regal assessment of his policies; "Reagan's theory was really 'trickle down' economics borrowed from the Republican 1920's (Harding- Coolidge-Hoover) and renamed 'supply side'. Cut tax rates for the wealthy; every one else will benefit. The supply side rhetoric 'was always a Trojan horse to bring down the top rate'. Many middle-class and poor citizens figured it out, even if the reporters did not". (Greider) Two years into Reagan's presidency, the United States experienced its worst recession since the Great Depression, with unemployment peaking at 10.8 per cent. Rather than take responsibility, Reagan attempted to blame the 1982 recession on his predecessor, Jimmy Carter. -Ronald Reagan, nationally televised campaign speech, October 24, 1980-(federal deficits totaled #252 billion under Carter. By the end of the Reagan presidency, federal deficits would total $1.4 trillion. Early in his presidency, Reagan chose as his economic advisors a group that espoused a radical economic theory called "supply-side". The supply siders told Reagan that if he gave tax cuts to the top brackets (the wealthiest individuals) the positive effects would "trickle down" to everyone else. Tax cuts they argued, would produce so much growth in the economy that America could just outgrow its deficits. Reagan bought into the supply side theory, which is why in 1981 he predicted that there would be a "drastic 3 reduction in the deficit". (Hayes) Budget Director David Stockman charges that the predicted growth rates of 5% which the Reagan program had assumed was "a rosy scenario", based on little more than faith, and that supply side was a Trojan horse designed to benefit the rich". (Hayes) As time passed the assessment of Stockman sounded like an echo resonating from every hamlet and institution in America. House speaker Tip O'Neill after a meeting with Reagan at the white house in November 1981 said. "He knows less about the budget than any president in my lifetime. He can't even carry on a conversation about the budget, its an absolute and utter disgrace". (O'Neill) Benjamin Hooks, then executive director of the National Association for the Advancement of Colored People, commented on Reagan's economic policies by saying; "For the last thirty years he's been in a dream worldI think he actually believes that giving more to rich people will make them work harder, whereas the only way to make poor people work is to tax their unemployment benefits"(Hooks) At his seventh press conference, President Reaganresponds to a question about the 17% black unemployment rate by pointing out that in this time of great unemployment, Sunday's paper had 24 full pages ofemployers looking for employees; though most of the jobs available-computer operator, for example, or cellular immunologist-require special training, for which his administration has cut funds by over 30%". (Slansky) In September the nation sinks into its worst recession since the Great Depression. Reagan fears budget deficits as high as $200 billion. On November 1, more than 9 4 million Americans are officially unemployed". (Timeline) Lester Thurow professor of economics at MIT says; "the epitaph of the Reagan presidency will be: "when Ronald Reagan became president, the United States was the largest creditor nation. When he left the presidency, we were the world's largest debtors nation". (Thurow) Richard Darman a Reagan adviser says; "In the Reagan years, more federal debt was added than in the entire history of the United States". (Darman) Analyze and assess the significance of the KAL shoot down and the crisis in U. S. Soviet relations "The incoming Reagan Administration apparently saw "disinformation" as just one more ideological weapon in the cold war arsenal, with the ends justifying the means. Coming as he did from the movies, President Reagan seemed to have only a casual relationship with the truth anyway. But his persistent acts of deception over his eight years in the White House cannot be so glibly explained or excused. In his handling of foreign policy in particular, Reagan routinely misled the American people". (Parry) One of the baldest - and now admitted-lies was the case of Korean Air Lines flight 007. On the night of August 30, 1983, the KAL jumbo jet strayed hundreds of miles off-course and penetrated some of the Soviet Unions' most sensitive air space, by flying over military facilities in Kamchatka and Salhalin Island. Over Sakhalin, KAL-007 was finally intercepted by a Soviet Sukhoi-15 fighter. The Soviet pilot tried to signal the plane to land, but the KAL pilots apparently did not see the repeated warnings. Amid confusion about the planes identity-a U. S> spy plane 5 had been in the vicinity hours earlier- Soviet ground control ordered the pilot to fire. He did blasting the plane out of the sky and killing all 269 people on board. The Soviets soon realized they had made a serious mistake. U. S. intelligence also knew from sensitive intercepts that the tragedy had resulted from a blunder, not from a willful act of murder. But in 1983, the truth about KAL-007 did not fit Washington's propaganda needs. The Reagan administration wanted to portray the Soviets as wantom murders, so it brushed aside the judgment of the intelligence analysts. There was a considerable amount of speculation as well as misinformation being bantered about on the morning and evening of the incidents occurrence. Alvin A. Snyder who was the director of the U. S. Information Agency's television and film division wrote in his book "Warriors of Disinformation" that, "the Reagan spin machine began cranking up". USIA director Charles Z. Wick "ordered his top agency aides to form a special task force to devise ways of playing the story overseas. The objective was quite simply, was to heap as much abuse on the Soviet Union as possible" (Snyder) In a boastful but frank description of the successful disinformation campaign, Snyder noted that, "the American media swallowed the U> S. government line without reservation. Said the venerable Ted Koppel on the ABC news 'Nightline': 'This has been one of those occasions when there is very little difference between what is churned out by the U, S. government propaganda organs and by the commercial broadcasting networks". (Parry) Then there is the case of the mistranslation of the Soviet tapes when the Soviet pilot was trying to communicate with the KAL plane, the administration translated the 6 word "zapros", or inquiry, as IFF for "identify: friend or foe". The AP's experts, however, said "zapros" could mean kind of inquiry, including open radio transmissions or physical warnings. The significance of the misrepresentation was central to the administrations case. US officials had extrapolated from "IFF" to advance the "murder in the sky" argument. Since an IFF transmission can only be received by Soviet military aircraft, that was further proof that the Russians made no attempt to warn the civilian airliner. Still the mistranslation was only one of the ways the tapes were doctored, as Snyder discovered when the intercepts were delivered to his office for transfer into a video presentation that was to be presented at the United Nations. "The tape was suppose to run 50 minutes". Snyder observed. "But the tape segment we [at USIA] had ran only eight minutes and 32 seconds Snyder in his capacity, had a job to do and President Reagan was his boss. He was instructed to create a perception which was described as; "The perception we wanted to convey was that the Soviet Union had cold-bloodily carried out a barbaric act". (Snyder) "Only a decade later, when Snyder saw the complete transcript - including the portions that the Reagan Administration had hidden - would he fully realize how many of the central elements of the U. S. presentation were false". (Parry) It was clear to Snyder that in pursuit of cold war aims, the Reagan Administration had presented false accusations to the United Nations, as well as to the people of the United States and the world. In his book, Snyder acknowledged his role in the deception and drew on an ironic lesson from the incident. The senior USIA official wrote. "The moral of the story is that 7 all governments, including our own, lie when it suits their purposes. The key is to lie first" (Snyder) Discuss Reagan's Central American Strategy and its Outcome The "Reagan Doctrine" was used to characterize the Reagan Administrations' (1981 - 1988) policy of supporting anti-communist insurgents where ever they might be. In his 1985 State of the Union Address, President Reagan called upon Congress and the American people to stand up to the Soviet Union, what he had previously called the "Empire of Evil". "We must stand by all of our democratic allies. And we must not break faith with those who are risking their lives - on every continent, from Afghanistan to Nicaragua - to defy soviet - supported aggression and secure rights which have been our since birth". (Reagan) Reagan's strategy was perhaps best encapsulated in NSC National Security Directive 75. This 1983 directive stated that a central priority of the United States in its policy towards the Soviet Union would be "to contain and over time reverse Soviet expansionism". Particularly in the third world. "The U. S. must rebuild the credibility of its commitment to resist Soviet encroachment on U> S. interests and those of its allies and friends, and to support effectively those third world states that are willing to resist Soviet pressures or oppose Soviet initiatives hostile to the United States, or are special targets of Soviet policy" (Directive 75) To that end the Reagan administration focused much of its energy on supporting proxy armies to curtail Soviet influence. Among the more prominent 8 examples of the Reagan Doctrines' application, in Nicaragua, the United States sponsored the contra movement in an effort to force the leftist Sandinista government from power". (Doctrine) The United States constitution contains a one-sentence definition of treason: "treason against the United States, shall consist only in levying war against them, or in adhering to their enemies, giving them aid and comfort" ( Constitution) If you're an American pondering whether to sell missiles to a foreign power with a proven history of sponsoring terrorism against the United States, you probably ought to think twice. It could be reasonably argued that this would be giving aid to an enemy of the U. S., and therefore expose you to a charge of treason. Seems pretty straight forward doesn't it And yet this is precisely what President Ronald Reagan did. But did he get impeached Nope. The American people decided that if the president was paving a road with his very best intentions, it didn't really matter where that road actually led. Who cares about a few broken laws And in the wake of overwhelming public apathy, the whole affair was quietly set aside. In July 1985 President Reagan denounced Iran as a part of a "confederation of terrorist states". Which had committed "outright acts of war" against the U. S. He declared Iran to be an enemy of the United States: -- their fanatical hatred of the United States, our people, our way of life, our international stature". (Reagan) "Thirty nine days after making that speech, Reagan's men began furnishing some of these fanatical American haters with what would eventually amount to 107 tons of anti-aircraft and anti-tank missiles. These shipments continued for more than a year. They 9 even continued beyond August 1986, when President Reagan signed into law a federal ban on arms sales to terrorists nations, which included Iran". (Iran-Contra) One would think that all of the previous act would have sufficed, that one would not be prone to press their good fortune any further: in the central American nation of Nicaragua, a war was raging. An army of guerrillas was engaged in a struggle to overthrow the communist regime which had recently came to power. The Reagan administration supported the revolutionary force, known as the contras, in their bid to overthrow the Sandinistas and restore a pro-American government in Nicaragua. Unfortunately, the Congress felt differently. Much differently. So differently, in fact that it passed a set of laws making it a crime to give aid to the contras. In doing so, the United states government had forbidden itself from furnishing the Contras with money or supplies of any kind. The White House was suddenly facing a crisis. They weren't allowed to send money. But even if they were, where would they get it During a 1984 meeting of the National Security Planning group, the president and his closest advisers weighed their options. It didn't take long for someone to hit on the idea of soliciting donations from private individuals. They set up a front organization and issued newspaper ads urging Americans to contribute $16 a month to sponsor a Nicaraguan rebel. The poster boy - a contra soldier with the highly dubious name "Charley" - appealed simultaneously to both our noblest ideals (as well as our sense of preservation). The Reagan administration continued to lobby Congress for Contra support. But in light of all the unseemly revelations lawmakers refused to budge. A solution was found the following year. The White House would sell surface-to-air missiles to the terrorist 10 state of Iran for a hefty profit. The country which had killed more than 200 marines in Beirut ponied up $12,237,000 for a cache of American weapons whose wholesale price was only $6,965,752. The resulting profit of $5,271,248 was kept totally under the table. Congress did not know about it. Nobody did. Most of the proceeds were funneled to the Nicaraguan contras, in violation of the Boland Amendment. Hence, it was illegal. When they finally got caught, the Reagan administration did everything they could to cover it up. On February 26, 1987 the Tower Commission Report is delivered to Reagan. The Report could not link Reagan to diversion of the funds from Iran to the contras. But it concluded that Reagan, confused and unaware, allowed to be misled by dishonest staff members who organized the trade of arms to Iran for hostages held in Lebanon and pursued a secret war against the Nicaraguan government. The Report charged that Reagan had failed to insist upon accountability and performance review, "allowing the National Security Council process to collapse. Reagan's public approval rating goes down to 42%. On march 8, 1985, President Reagan attempts to drum up public support for the contras: "they are our brothers, these freedom fighters of Nicaragua. You know the truth about them. You know who they are fighting and why. They are the moral equivalent of the founding fathers and the brave men and women of the French Resistance" (Reagan) On June 6, 1985, the Senate authorizes $38 million in nonmilitary aid to the contras. 11 Evaluate Reagan's policy toward the Iran - Iraq war, the Iran initiative, and the contra connection Newly classified US intelligence (SNE 34/36 2-82) which explores the domestic and foreign implications of Iran's apparent (in 1982) victory of Iraq in their two year old war shows how US was behind the prolonged conflict to keep Iran from winning the war for numerous reasons which were against the interests of the United States. "The United States had been weary of the Tehran regime since the Iranian revolution., not least because of it Tehran embassy staff in the 1979-81 Iran hostage crisis. Starting in 1982 with Iranian success on the battlefield, the U. S. made its backing of Iraq more pronounced, supplying it with intelligence, economic aid, normalizing relations with the government (broken during the 1967 six day war), and also supplying weapons" (Tehran) "An Iraqi plane accidentally attacked the USS Stark, a Perry Class frigate on May 17, killing 37 and injuring 21. Bur US attention was on isolating Iran; it criticized Iran's mining of international waters, and sponsored UN Security Council Resolution 598, which passed unanimously on July 20. In October 1987, the U. S. attacked Iranian oil platforms in retaliation for an attack on the US flagged tanker Sea Isle City. On April 14, 1988, the frigate USS Samuel B. Roberts was badly damaged by an Iranian mine. Us forces responded with operation Praying Mantis on April 18, the United States Navy's largest engagement of surface warships since WW II. Two Iranian ships were destroyed, and an American helicopter was shot down, killing two pilots" (Wilkipedia) Through all of this members of the Reagan Administration had, at the same time been secretly selling weapons to Iran. It claimed that the administration hoped Iran 12 would, in exchange, persuade several radical groups to release western hostages. The money from the sales were channeled to equip the Nicaraguan contras, anti-communist rebels. On July 18, 1985, President Ronald Reagan declares during a televised press conference: "Let me further make it plain to the assassins in Beirut and their accomplices wherever they may be, that America will never make concessions to terrorists - to do so would only invite more terrorism - nor will we ask or pressure any other government to do so. Once we head down that path there would be no end to it, no end to the suffering of innocent people, no end to the bloody ransom all civilized nations must pay". (Reagan) "Then seven days later, as if his July 18 remarks gave him an epiphany, Ronald Reagan approves the William McFarlane plan to provide Iranians with weapons through a conduit. Through arms dealer Manucher Ghorbanifar, who was a personal friend of Iran's Prime minister, Hussein Mousavi. On July 25, 1985 Israel condition a working agreement through Ghorbanifar. Iran would buy their missiles from Israel and America would replenish the stock of Israel"(Iran-contra) At this time jockeying for position with Moscow was still a crucial consideration for the United States. In a section of a draft National Security document that elicited no dissent, US long term goals were said to include "an early end to the Iran-Iraq war without Soviet mediation" (Tower) Iran remained committed to its maximum war aims, a commitment not lessened by the fact that Oliver North, apparently with authorization, told Iranian officials that Reagan wanted the war to end on terms favorable to Iran, and that Saddam Hussein had 13 to go." (Tower) Iraq responded to Iranian victories on the ground by making use of its advantage in technology: It escalated the tanker war, employed chemical weapons, and launched attacks on civilian targets. Iran retaliated by striking gulf shipping, starting in 1984 and launching its own attacks on civilians, though on a lesser scale than Iraq. Iran charged that the Security Councils' handling of each of these issues reflected animus against Iran. "Could the war have ended by a compromise in early 1988 The answer will never b known, primarily because the United States was unwilling to explore Iran's offer. The U.S. position - - and sensitivities about even the perception of any sympathy toward Iran were a direct legacy of the Iran-contra fiasco. The U. S. may have contributed to prolonging the war for six unnecessary months". (Sick) The more one researches the policy and strategy of the Reagan administration on the Iran-Iraq war, the clearer it becomes that the United States or the Reagan administration had a macro strategy in place and it evolved around keeping the Soviet Union out of the mix. There was little if any concern for the well being of the people of Iran or Iraq and if one were to view the strategy from a pragmatic point of view, then the conclusion would be that the Reagan administration were working to have the two countries eliminate each other. Surely there was no humanitarian or peaceful motives inherent in the American policy to provide arms to Iran. This move was motivated on the basis of the inability of Reagan to obtain funds through legal channels to support their private war in Nicaragua. 14 Evaluate Reagan's legacy and his role in bringing the "cold war" to an end In the heady days after Ronald Reagan's victory in 1980, conservatives took dead aim at the CIA's analytical division for not agreeing with the right's preferred assessment that the Soviet Union was a rising super power with both the capability and the intent to overwhelm the United States militarily. The incoming Reagan administration wanted an alarmist assessment of the Soviet Union to justify a major arms buildup. Robert Gates in his memoirs describes the perceptions of Ronald Reagan and his associates in the early days of the Reagan administration says; "that the Reaganites saw their arrival as a hostile takeover in the most extraordinary transition period of my career". (Gates) Gates himself an anti-Soviet hardliner would become a key assistant to Reagan's CIA director William Casey. "for the first time in decades, an incoming president orchestrated a comprehensive battle plan to seize control of a city long believed to be in enemy hands. Main force political units, flanking maneuvers, feints, sappers and psychological warfare all played their part as Reagan and company between November and January deployed their forces for a political blitzkrieg. During the transition, every department and agency became a political and ideological battlefield". (Gates) Since the president and vice president took office and Casey arrived at the CIA, the war over intelligence broke out in earnest. The first pitched battle came over an analysis of the Soviet Union's support for international terrorism. Claire Sterling in her book, "The Terror Network", she convincingly made the case that the Soviet Union was supporting international terrorism as a way to destabilize the west in general and the United States in particular. The foreign policy principles of the 15niiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii Reagan-Bush administration were friends of Sterling's hypothesis. Melvin Goodman the chief of the CIA's office for Soviet analysis wrote; "there was not evidence to support such a charge but Casey had read Sterling's book (Terror Network), like Haig, was convinced that a Soviet conspiracy was behind global terrorism". (Foreign policy) While worst case scenarios were in order for the Soviet Union and other communist enemies, best-case scenarios were the order of the day for Ragan-Bush allies, which at the time included Osama Bin Laden and other Arab extremists rushing to Afghanistan to wage a holy war against European invaders, in this case, the Russians. As for the Pakistani drive to get a nuclear bomb, the Reagan-Bush administration turned to word games to avoid triggering anti-proliferation penalties that otherwise would be imposed on Pakistan. In an interview, Dickinson said, "there was a distinction made to say that the possession of the device is not the same as developing it. " They got into the argument that they don't quite possess it yet because they haven't turned the last screw into the warhead. As long as they have not done that, they don't possess it yet. So the aid could continue. No matter how you look at that, there was a subordination of intelligence to a policy to aid the Afghan rebels no matter what" (Parry) As the Reagan-Bush administration settled in, the CIA's analytical division came under ever-increasing pressure to comply with Ronald Reagan's "Evil Empire" rhetoric. Works Cited ab Center for Documents of the Imposed war Darman, Richard, Who's In Control Polar Politics Friedman, Milton, Freedom's Friend, Hoover Institution, Summer 2004 Gates, Robert, From the Shadows Hahn, Walter F. Central America and the Reagan Doctrine Hayes, James, The Ronald Reagan Years-The Real Reagan Record, Trtrieved on line on April 9, 2006, from www.geocitird.com Iran-contra,Retrieved on line on April 8, 2006, fromwww.rotten.com Iran-Iraq, Retrieved on line on April8,2006, from www.wikipedia.org Kidd, Devvy, Kal-007 (Sakhalim incident) follow-up 12/10/99Retrieved on line on April 8, 2006, from www.devvy.com Leckon, Ross, The Iran-Iraq Conflict in the Gulf, The Law of war zones, International and comparative law quarterly, vol 37 July 1988, p. 640 National Security Directive 75 Parry, Robert, Gop and KAL-007: The Key is to Lie First Parry, Robert, The CIA DI Disgrace Reagan-Bush Foreign Policy Summer 1997 Sciolino, Elaine, How the US Cast Neutrality in Gulf War, New York Times, 24 AP 1988 p.2E Sick, Gary Trial and Error: Reflections on the Iran-Iraq War, Middle East Journal, vol 43, no 2 Spring 1989 p.240 State of the Union Address, 1985 Sterling, Claire, The Terror Network Snyder, Alvin, Warriors of Disinformation, Interview Tower Commission pp.117-118 Read More