ROBB AUSTIN'S TURN
Reagan’s Vision from the Roosevelt Room
February 21, 2014
The first time I met President Ronald Reagan was in August of 1981.
It was in the Roosevelt Room in the West Wing of the White House. The President was talking to a group of high rollers (major Republican donors) from the state of Connecticut.
Former Chairman of the Republican National Committee Lee Atwater, who was a special assistant to the President at the time, asked me to sit in on the meeting.
The Roosevelt Room is impressive. A few feet from the Oval Office, it is the best known meeting room in the West Wing of the White House. It was once the presidential office of President Theodore Roosevelt. His “Rough Rider” portrait hangs above the fireplace mantel in this impressive conference room.
On this particular evening, President Reagan was asking the group of influential Republicans to continue their support for his economic recovery program, most notably his across the board tax cuts that just passed Congress.
It had been a bruising political fight but Reagan put together a coalition of Republicans and Democrats to get it passed. The country had suffered economically for years and Reagan’s economic approach was new and different but he was confident recovery was just around the corner.
As was his custom, Reagan used the backdrop of his Hollywood experience to explain the genesis of his economic philosophy. His tax cuts were for everyone, the rich and the middle class, because he wanted to provide incentives for high-end individuals and companies to hire a lot of people.
On this evening, he told the group a story about the filming of one scene in the classic 1940 biographical film, Knute Rockne, All American, a movie about the famous Notre Dame Football coach. Reagan played the part of Notre Dame All American George Gipp, which among other things, gave him the lifelong nickname of The Gipper.
Reagan explained, “There was one scene in the movie that had only one farmer and one horse in it, but shooting on location for that scene created work for some seventy people.” He told the group that this one experience convinced him early-on in his political career that tax cuts for all tax brackets were beneficial in stimulating an economy and to creating jobs.
Historically, the average length of a recession lasts 18 months. Yet, despite what economists say, the recession that supposedly ended in June of 2009, seems to be continuing even now.
Many people report they have lost hope of finding work, or have been forced to take early social security benefits or accept jobs beneath their professional skill. Some have simply dropped out of the workforce or are going back to school in an effort to learn new skills. For baby boomers, who are entering their mid fifties and sixties, finding a job is particularly difficult.
It's unfortunate that these times represent the new normal of an economic recovery. President Reagan inherited an economy that in many ways was worse than today (unemployment peaked at over 10%), yet his program produced millions (yes, millions) of new jobs throughout the 1980s.
As this economic drubbing continues, my thoughts go back to President Reagan and the night he explained, in part, how a Hollywood scene consisting of one farmer and one horse influenced an economic theory that produced so many new jobs and opportunities.
It was a theory and recovery the likes of which we desperately need today.