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One of the most important speeches given in the last fifty years must be Ronald Reagan’s inaugural address January, 20 1981. In this speech, he laid the groundwork for what would arguably be one of the most impressive eight years for growth and a return to less intrusive federal governance. It is essential to realize the conditions to which Reagan was speaking, and the positions from whence he personally spoke. Reagan’s speech was not just his own words, but the words of men who had laid the groundwork of our Republic yet echoing in his own unique way.
The Condition of The United States, January 20, 1981
On that cold day in January 1981, the country was in the midst of a recession that had started in 1979. Interest rates were ranging between 15% and 20%, and economists refer to this time period as Stagflation. Stagflation occurs when unemployment remains high, and the problem is compounded by slow economic growth; it had been a nearly decade long epidemic. Reagan, having graduated from Eureka College with a degree in Economics, had spent a majority of his life in the private sector. He knew how economic troubles could effect employers as well as employees. Reagan had also been the Governor of California in the mid to late 1960’s. He understood how the action from a capital could benefit or harm those in his electorate. It is also important to understand that our 39th President had begun
working in the early 1930’s, during the height of the depression. So the long malaise of the 1970’s stagflation looked bleak, but not insurmountable. The marginal tax rate on the highest earners was 70% when he was sworn in as Executive. Tax rates had not been cut, significantly, since 1964 under a Democrat Presidency. Kennedy had proposed the tax cut, but Johnson signed it into law. Remember also that there had been Republican Administrations not long before Reagan’s election in 1980. Interestingly, stagflation began under Nixon’s Administration, and continued during Ford’s, despite commissions and committees being appointed to address the economic phenomenon never ameliorated.
Internationally and domestically, people and governments had little faith in the United States as a whole in 1981. Just eleven years previous to this time, there had been riots against the Vietnam War on university campuses and at the Democratic Convention. The bulk of the troops from Southeast Asia had only been home for six or seven years after a long arduous war . These same troops were told countless times that they had fought an “unwinable war” and their service in that war was “good for nothing.” To rub salt in the wounds of these veterans, many could not find work.
Meanwhile, the Soviet Union was making advancements in technology, and was expanding it’s influence internationally. They were even spreading their influence throughout South and Central America. Oil prices had spiked as the Iranian Revolution had erupted, and they had continued to rise by 1980. Iran had also held our embassy, and several of those who worked in it for 444 days. Tehran was an increasing threat to the world showing a declared animus toward the west, specifically the U.S. After the popular overthrow of the Shaw of Iran Mohammed Reza Pahlavi, a long standing U.S. ally, in 1979, Iran’s fundamentalist cleric Ayatollah Khomeini came to power, seizing the middle eastern country’s large military and oil fields. Followers, students, and other young people, rioted outside the U.S. Embassy until the rioters captured it, leading to the hostage crisis.
This explanation only scratches the surface of the national doldrums that our country faced. In general, Carter’s coined term of the 70’s “malaise,” was what Reagan had run for President to help undo.
A Speech That Gave America Substantive Hope
As President, Reagan was not only given the task of giving leadership after years of administrative weakness, he stood before the audience on the National Mall and the larger audience watching him on television, to give his fellow citizens some hope. This speech would either place him in the category of those Presidents who have soaring rhetoric mixed with masked pessimism, or this speech would bring an opportunity for people to feel pride in their country and their own abilities to weather trying times. Reagan is known as the great communicator for being the latter. He would lay the groundwork for a new decade by speaking of returning rights to citizens and individual States. He would speak with similar words as many before him, but he would give these words his unique voice.
Having said that, the first few paragraphs of his speech are very much like any President who has seen economic trouble. He speaks of the pain citizens experience, by addressing unemployment. The inflationary period is mentioned (Reagan does not use the word Stagflation) as the daunting issue that it was. In fact, one would be hard pressed to find a worse period of inflation. The possible exception being the currency panic after Andrew Jackson did away with the Bank of the United States.
The 39th President shows himself to be in unique company, starting in the fifth paragraph. He is, after the New Deal, only one of three Presidents to put a priority on tax cuts. “Those who do not work are denied a fair return to their labor by a tax system which penalizes successful achievement and keeps us from maintaining full productivity.” Reagan’s words here, while rare since FDR’s New Deal, are certainly not unique in Presidential Speeches. In Calvin Coolidge’s first inaugural address in December 6, 1923, he said, “The taxes of the nation must be reduced now as much as prudence will permit and expenditures must be reduced accordingly. High taxes reach everywhere and burden everyone. They gear most heavily on the poor. They diminish industry and commerce. They make agriculture unprofitable.” The thirtieth President and Reagan understood that freedom comes from an unimposing tax policy on the private sector. They both must have been students of Thomas Jefferson, who knew the importance of people being in control of their own money. In our third President’s first inaugural he said, “A wise and frugal Government…shall leave them otherwise free to regulate their own pursuits of industry …and shall not take from the mouth of labor the bread that it has earned.”
Jefferson, Coolidge, and Reagan all believed not only in reduction of taxes, but also in a reduction of spending. Reagan and Jefferson would both disappoint those who held strongly to these ideals. Jefferson would be the first President to buy land in the name of the federal government, which angered many of his Democratic Republicans. In Reagan’s inaugural, paragraph six could have been written by Coolidge when Reagan states, “great as our tax burden is, it has not kept pace with spending. (We are) mortgaging our future…for the temporary convenience of the future.” Reagan fell short of Coolidge in reducing debt and actually increased the deficit during his time in office. Coolidge had cut taxes and kept spending low, (the spending cuts introduced by his successor Harding). Reagan’s quote shows that he intended to emulate Coolidge. He had even ordered Truman’s portrait removed from the Cabinet Room of the White House, and he had it replaced with one of his favorite Presidents, Calvin Coolidge. The Harding-Coolidge administration had also “inherited” a recession. The Harding-Coolidge era recession was one of the shortest recessions in U.S. history because of the belief in getting out of the way of the private sector. Reagan’s record on keeping spending under control is disappointing to many conservatives, but the economic growth that came about after the Reagan tax cuts brought the recession- and stagflation to an end.
Reagan then attacked the big Government policies of Carter, Johnson, FDR, and others, in paragraph eight. “The economic ills we suffer have come upon us over several decades.” Over the previous “several decades” before Reagan was elected, there had been a steady growth in the scope of the Federal Government. In paragraph fifteen, Reagan says, “It is no coincidence that that our present troubles (are) parallel…to the intervention in our lives that result from…growth of government.” Reagan is calling his audience to the common sense of “” conservatism. However, he says it in such a skillful way that for too much of his audience, his words simply seem to be a rebutting of Washington D.C. - and at some level it is. More importantly, at a higher level, he is calling to rely less on governmental programs and more on the wisdom of ourselves and business. Reagan believed, and subtly implies, that the “New Deal” and the “Great Society” had complicated and punished wealth creation (and they did).
In paragraph ten, he chooses (purposely, I believe) to mention professions predominantly in the private sector, “industrialists, shopkeepers, clerks, cabbies and truck drivers.” Once again he is speaking with his own voice, but he reflects Coolidge’s words, “the chief business of the American people is business. They are profoundly concerned with buying, selling, inventing and prospering…the great majority of people will always find these are moving impulses of life.”
The thirty ninth President uses his inaugural address to bring us back to founding principles. Paragraph nine has the famous words, “government is not the solution to
