Transforming America

Politics and Culture During the Reagan Years

Robert Collins

• Publisher: Columbia University Press
• Year: 2006
• ISBN:
  9780231511308
• Topic: History
• Subtopic: North American History
• Index: History

By the end of the 1980s, the "malaise" that had once pervaded American society was replaced by a renewed sense of confidence and national purpose. However, beneath this veneer of optimism was a nation confronting the effects of massive federal deficits, a reckless foreign policy, AIDS, homelessness, and a growing "cultural war."

In Transforming America, renowned historian Robert Collins examines the decade's critical and controversial developments and the unmistakable influence of Ronald Reagan. Moving beyond conventional depictions that either demonize or sanctify Reagan, Collins offers fresh insights into his thought and influence. He portrays Reagan as a complex political figure who combined ideological conservatism with political pragmatism to achieve many of his policy aims. Collins demonstrates how Reagan's policies helped to limit the scope of government, control inflation, reduce the threat of nuclear war, and defeat communism. Collins also shows how the simultaneous ascendancy of the right in politics and the left in culture created a divisive legacy.

The 1980s witnessed other changes, including the advent of the personal computer, a revolution in information technology, a more globalized national economy, and a restructuring of the American corporation. In the realm of culture, the creation of MTV, the popularity of self-help gurus, and the rise of postmodernism in American universities were the realization of the cultural shifts of the postwar era. These developments, Collins suggests, created a conflict in American society that continues today, pitting cultural conservatism against a secular and multicultural view of the world.

Entertaining and erudite, Transforming America explores the events, movements, and ideas that defined a turbulent decade and profoundly changed the shape and direction of American culture and politics.

Chapter 1

“MALAISE”

“The nation needed a Jimmy Carter,” Lyn Nofziger has written, “in order truly to appreciate a Ronald Reagan.”¹ Nofziger, who was one of Ronald Reagan’s closest political advisers during the Californian’s long, slow ascent to national prominence, might be excused the partisan bite of his comment. But he was correct in a more general—and generous—way than he perhaps intended: We do, indeed, need to grasp the nature and extent of America’s vexing problems in the 1970s in order to understand Ronald Reagan’s presidency and to assess the claim the 1980s make on our attention as a distinctive and significant historical era with a unique tenor. The 1970s were a time of testing for Americans, and many came to fear that the nation had lost its ability to master its problems. The result was a palpable loss of confidence, a disturbing sense that the nation’s drift might easily turn into permanent decline. Serious observers began to talk of an American climacteric, of a sclerotic society irreversibly succumbing to the ravages of age. It was in the 1970s, amongst those problems and those fears, that the era of the 1980s actually began.

STAGFLATION

At the heart of America’s crisis of confidence lay a dramatic decline in the fortunes of the U.S. economy during the 1970s.² The defining event of the decade was the oil embargo engineered by the Organization of Petroleum Exporting Countries (OPEC) in 1973–1974. A cartel that had been created in 1959 in an effort by the oil-producing states to control their own economic destiny, OPEC seized the opportunity presented by the 1973 Arab–Israeli conflict to begin to raise world oil prices in earnest. When Egypt and Syria attacked Israeli positions in October 1973, beginning the so-called Yom Kippur War, the Arab oil-states immediately cut their production by 10 percent in an attempt to pressure Israel’s chief ally, the United States. After some early reversals and a massive resupply effort by the Nixon administration, the Israelis prevailed militarily. The Arab oil producers promptly embargoed the shipment of oil to the United States, Portugal, and Holland as punishment for their aid to Israel. And when the embargo was lifted in the spring of 1974, OPEC continued to raise the world price of oil, which moved from $1.99 per barrel on at the beginning of the Yom Kippur War to over $10 per barrel by the end of 1974.

The impact of the resultant energy crunch was substantial. The massive increase in the cost of energy reverberated throughout the American economy and triggered the recession of 1974–1975, the most serious economic downturn since the Great Depression. Both the GNP and the stock market dropped precipitously. New York City tottered on the brink of bankruptcy. In the spring of 1975, the unemployment rate reached 9 percent, its highest level since 1941. At the same time, skyrocketing energy costs combined with stubbornly entrenched inflationary expectations initially generated by Lyndon B. Johnson’s Vietnam War–era guns-and-butter policy to push the annual rate of inflation into double digits. Economists called the combination of low-capacity operation and high unemployment coupled with rapidly rising prices “stagflation.” The conventional wisdom that the economy might suffer from stagnation or inflation but never both simultaneously was sadly proven wrong.

Moreover, the stagflation of the 1970s resulted from forces more structural, endogenous, and long-running than the temporary oil embargo and the sudden spike in energy prices. The resurgence of international economic competition from both Europe and Asia had American business reeling. Over the course of the decade, the United States lost 23 percent of its share of the total world market, despite a 40 percent depreciation in the value of the dollar that made U.S. exports cheaper and imports more expensive. By 1979, imported consumer electronics had captured more than half the American market. In a pattern repeated elsewhere in the economy, Japanese manufacturers took an American invention, the videotape recorder (VCR), and mass-produced it so efficiently that their exports soon came to dominate the U.S. market. In the metalworking machinery sector, the West Germans overtook U.S. firms in the world market, while at home foreign firms captured 25 percent of the American market for such goods.

In steel, as American facilities became increasingly outdated and uncompetitive, producers relied on government protection in the form of “voluntary” import quotas and trigger-price mechanisms to defend their hold on the domestic market. At the end of the 1970s, U.S. Steel’s Fairfield Works in Alabama was still partially steam-powered! Meanwhile, the Japanese used the cheap, efficient process known as continuous-slab casting (which had been developed in the United States) to manufacture half of all Japanese steel, whereas the U.S. steel industry’s use of that technique accounted for only 16 percent of its steel output. When the United States sought to boost tank production after the Yom Kippur War, Secretary of Defense James Schlesinger was stunned to discover that so much American foundry capacity had been closed because of low profitability that he had to turn to foreign suppliers to provide the needed turrets. “No greater change from World War II could be imagined,” he later exclaimed: “The great arsenal of democracy without foundry capacity!”³

No single industry illustrated America’s competitive woes more vividly than auto manufacturing. The 1970s were an unmitigated disaster for Detroit. The competitive arrival of the Japanese carmakers, which at the beginning of the decade made big inroads in California by aiming at the low-price end of the passenger car market, was a particularly devastating development. The American manufacturers, accustomed to easy domination of their domestic market, failed at first to see the danger—when the famous racer Carroll Shelby telephoned the Ford executive Lee Iacocca to say he’d been offered a Toyota dealership in Houston, Iacocca replied, “Let me give you the best advice you’ll ever get. Don’t take it…. Because we’re going to kick their asses back into the Pacific Ocean.”⁴ By 1980, the Japanese had captured 22 percent of the United States market, with imports overall constituting 27 percent of domestic auto sales.⁵

Cars from such Japanese giants as Honda, Toyota, and Datsun (now Nissan) consistently outshone their American counterparts in build quality, durability, fuel efficiency, repair record, and overall consumer ratings, all while posting a cost advantage that averaged $2,000 per unit.⁶ Iacocca, who left Ford and ultimately headed the Chrysler Corporation, later reported that “Chrysler’s quality had been so poor that the dealers got into the habit of expecting to rebuild cars when they received them.”⁷ In a sense, the buyers of domestic cars in the 1970s did the factories’ quality-control work for them—Ford, for example, counted warranty claims to measure its product quality.⁸ In 1979, a professor at the Harvard Business School attracted national attention and grudging nods of agreement with a new book entitled Japan as Number One.⁹

At the heart of all these economic problems—stagnation, inflation, and a decline in international competitiveness—lay perhaps the most troubling development of all: a sharp decline in the productivity of American workers. As economists are fond of saying, productivity isn’t everything, but it is almost everything. When all is said and done, it is productivity—specifically gains in productivity—that drives an economy forward to a higher standard of living. During the impressive postwar quarter-century from 1948 to 1973, output per man-hour grew at over 3 percent per year. Over the next five years, output per man-hour declined by two-thirds to grow at a rate of 1 percent per year. The average for 1977–1978 was a dismal 0.4 percent.¹⁰ Although Americans remained the world’s most productive workers, improvement in productivity had slowed dramatically, making it likely that America’s most energetic competitors would in the not-too-distant future close the gap in this most fundamental of economic measures.

Economists were, and remain, at a loss to explain conclusively the slowing of productivity growth. A partial answer lay in the entry into the labor force of large numbers of young people—baby boomers come of age—and of female workers. Both groups were relatively inexperienced and thus by definition relatively inefficient workers until they mastered the learning curve in their various endeavors. Increased government regulation also played a role. Carter’s Council of Economic Advisers in 1979 estimated that the direct costs of compliance with environmental, health, and safety regulations might have reduced productivity growth by 0.4 percentage points per year since 1973. Meanwhile, the onset of economic tough times saw a drop in business investment in labor-saving equipment and a reduction in overall societal spending for research and development. Finally, the 1970s also witnessed the continuation of a secular shift in the economy away from the manufacture of goods toward the provision of services, and productivity gains in the burgeoning service sector were notoriously difficult both to realize and to measure.¹¹

Most striking, the perverse intertwining of economic stagnation, rapid inflation, declining competitiveness, and flatline productivity brought to an end a quarter-century of mass upward economic mobility, the postwar golden age of economic growth and stability. Between 1973 and 1979 real median family income actually fell as the vital signs of the U.S. economy flickered ominously. Make no mistake: At the end of the 1970s, Americans were exceedingly well off by both historical and international standards. But they looked back wistfully on the postwar boom as a past they had lost. Unemployment made them insecure about the present and inflation made them fearful of the future. In 1979, 72 percent of the public agreed with the statement “We are fast coming to a turning point in our history where the ‘land of plenty’ is becoming the land of want.” Writing in Time magazine, the journalist Lance Morrow observed, “From the Arab oil boycott in 1973 onward, the decade was bathed in a cold Spenglerian apprehension that the lights were about to go out, that history’s astonishing material indulgence of the U.S. was about to end.” Americans now confronted harsh economic realities that defied conventional analysis and economic problems that defied easy solution. Worse still, they faced an economic future more uncertain than at any time since the Great Depression.¹²

WATERGATE, VIETNAM, AND THE CONFIDENCE GAP

The bad news of the 1970s was not exclusively economic. Americans suffered still other blows to the national sense of well-being. The world of public affairs contributed two particularly devastating experiences—Watergate and Vietnam. Watergate was both a political scandal and a constitutional crisis. It unfolded slowly but inexorably, and from the initial discovery of the burglars in the headquarters of the Democratic National Committee at the Watergate complex in June 1972 to Richard Nixon’s resignation as president in August 1974, Watergate held the attention of the nation throughout. Americans were preoccupied, indeed, nearly transfixed, as the drama played itself out.¹³ The new president, Gerald Ford, so feared that Americans would not be able to put Watergate behind them that he risked his own political standing by granting the fallen Nixon a full presidential pardon, in order to assure that Nixon would not continue to dominate the national scene from a courtroom or jail cell. Within days Ford’s approval rating plummeted from 71 percent to 50 percent.¹⁴

Despite Ford’s courageous attempt finally to put to rest what he had at his swearing-in ceremony called “our long national nightmare,” the toppling of a sitting president left deep scars. Ultimately some seventy individuals, including several cabinet members, two Oval Office aides, and a number of presidential assistants, were convicted of, or pleaded guilty to, Watergate-connected crimes. As the political commentator Elizabeth Drew subsequently reported:

[Watergate] … shook our confidence. We had had a kind of faith that we would never elect a really bad man as president—an incompetent or a fraud, perhaps, but not a man who would preside over criminal activities and seek to take away our liberties. We had a deep, unexamined confidence in the electoral system. The system was messy, but we had come to depend on it to keep us well within the range of safety. And then it didn’t.¹⁵

The ignominious conclusion of the war in Vietnam followed upon Watergate like the second blow of a vicious one-two punch painfully replayed in slow motion. Nixon and his national security adviser, Henry Kissinger, had negotiated an American withdrawal from Vietnam in early 1973, as part of an arrangement that they labeled, all too prematurely, a peace with honor. But the agreement, which left the North Vietnamese army (NVA) in place in South Vietnam, began to unravel almost immediately. In April 1975 the communists swept into power in both Cambodia and South Vietnam in swift and final military offensives.

There was scant honor for the United States in any aspect of the war’s sudden conclusion. Cambodia fell to the communists shortly before the endgame in Vietnam. Kissinger, at that time the Secretary of State, read aloud at a somber mid-April cabinet meeting a letter from Sirik Matak, the former Cambodian prime minister, who awaited the entry of the victorious Khmer Rouge communists into the Cambodian capital of Phnom Penh. Turning down an offer by the American ambassador to arrange for his evacuation to safety, Matak wrote stingingly:

Dear Excellency and Friend:

I thank you very sincerely for your letter and for your offer to transport me towards freedom. I cannot, alas, leave in such a cowardly fashion. As for you, and in particular for your great country, I never believed for a moment that you would have this sentiment of abandoning a people which has chosen liberty. You have refused us your protection, and we can do nothing about it.

You leave, and my wish is that you and your country will find happiness under this sky. But, mark it well, that if I shall die here on this spot and in my country that I love, it is no matter, because we all are born and must die. I have only committed this mistake of believing in you [the Americans].

Please accept, Excellency and dear friend, my faithful and friendly sentiments.

Occupying Phnom Penh, the Khmer Rouge promptly executed Matak, shooting him in the stomach and leaving him, without medical assistance, to die three days later.¹⁶

Matak’s death was but a foretaste of his country’s fate. Anthony Lewis, then the foreign affairs columnist of the New York Times, had asked just a few weeks earlier, “What future possibility could be more terrible than the reality of what is happening to Cambodia right now [due to fighting in the war]?” Immediately before the fall of Cambodia’s anti-Communist regime, the New York Times foreign correspondent Sydney Schanberg—who would receive a Pulitzer Prize for his reporting from Cambodia—wrote in a front-page story that “for the ordinary people of Indochina … it is difficult to imagine how their lives could be anything but better with the Americans gone.”¹⁷ Unfortunately, the Times’ journalistic imagination proved no match for the Khmer Rouge’s ruthless determination to create a new society in Cambodia. Over the next several years, America and the world watched with horror as the Khmer Rouge killed somewhere between one and two million Cambodians (of a total population of approximately seven million) in one of the worst episodes of state terror in the history of the exceedingly bloody twentieth century.¹⁸ Using a perverse moral calculus that refused to place the responsibility for such crimes on the direct perpetrators, some observers blamed the Cambodian horror on America’s Vietnam war policies; others saw the outcome as the proof that the domino theory advanced to justify U.S. intervention in Indochina had been right after all. Neither line of ana...

Table of contents

• Cover 
• Half title
• Title
• Copyright
• Contents 
• Acknowledgments
• Introduction
• 1. “Malaise”
• 2. Enter Ronald Reagan, Pragmatic Ideologue
• 3. Reaganomics
• 4. Greed Is Good? The American Business System in the Eighties
• 5. Social Problems, Societal Issues
• 6. The Postmodern Moment
• 7. Culture War
• 8. Combating the Evil Empire
• 9. Winning the Cold War
• 10. The Eighties Legacy: The Recentering of Politics and Culture
• Notes
• Index