I just finished reading a really good book “The Reagan I Knew,” the last book published by William F. Buckley, Jr., and I noticed two passages (and one word!) that I wanted to share with you, and I will, each in their own posting this morning – this is the second of the three postings.
Next up – 10% unemployment:
On an episode of Mr. Buckley’s show Firing Line, he had an interview with candidate Ronald Reagan wherein he regarded Gov. Reagan as if he were, already, President (in an effort to help voters see him in that role, no doubt – WFB had done a similar interview when Ronald Reagan was running for Governor of California) – one of the topics how would “President Reagan” handle ten percent unemployment.
BUCKLEY: Mr. President, the Department of Commerce announced yesterday that during the preceding quarter unemployment had gone to a level of 10 percent. What do you propose, by way of remedial action, to Congress?
REAGAN: Wait a minute. That unemployment had gone had gone–
BUCKLEY: From 6 percent to 10 percent in the last quarter.
Reagan: Well, that’s probably due to some of the massive layoffs in the automobile industry, and again aren’t we getting to a–
BUCKLEY: This is a hypothetical, you understand.
BUCKLEY: This is a hypothetical.
REAGAN: Oh, this is a hypothetical. Well, I don’t think that would happen—
BUCKLEY: You can’t challenge a hypothesis.
REAGAN: –in this administration that we’re talking about – because by that time we would have gone to work–
BUCKLEY: But suppose it happened the day after you were inaugurated, so you could still blame the preceding administration?
REAGAN: And I would. [Laughter.] Without question, I would.
BUCKLEY: What would you propose, to turn the economy back towards fuller employment?
REAGAN: Well, we would start an immediate program of cutting income-tax rates across the board for everyone, to provide incentive for individuals. We would go after some of the punitive taxes and the tens of thousands of regulations which are keeping American industry from being as competitive as it could be in the world market. Our rate of increase in per-man hour productivity is only a third what it is in Japan, half what it is in West Germany – not because our working people aren’t as good as their working people, but because we have the highest percentage of outmoded industrial plant equipment of any of the industrialized nations. This is because federal-government practices have kept us from having the capital we need to modernize, but what capital investment we do make is to answer to government mandates to meet environmental or safety standards, ideas that the bureaucracy has.
I have in speeches around the country been pointing out there are seventeen United States Steel Company plants closing in this country. We once produced 47 percent of the steel in the world. We now produce 19 percent. But there are twenty-seven government agencies imposing 5,600 regulations on the steel industry.
I would also like to eliminate the tax on interest on savings accounts to encourage thrift, because the American people are saving at the lowest percentage of their earnings that they ever have saved and lower than the workers in other countries. Thus we’re reducing the capital we have for research and development, to develop new products that will employ those people that are no longer needed in the steel mills and so forth.
If we’d do all those things, I think we’d begin to see, because three times in this century – four times in this century, three times under Republicans, once under a Democratic administration – we followed that policy of an across-the-board tax reduction, and the burst of prosperity was so great that even in the first year the government got more money at the lower tax rates than it had been getting at the higher tax rates. And I just have faith in the marketplace, and I believe that this is the way we must go to curb inflation. This is the way we must go to put us back where we were as an industrial giant.
BUCKLEY: While you are encouraging these tax reductions, there is inevitably a deficit in the cost of government operations. This you would cope with how?
REAGAN: Well, since the General Accounting Office says that there’s probably fifty billion dollars lost at the federal level alone through fraud and waste, we might want to start with that. That would certainly eliminate the deficit right now, if you could eliminate that. And from my own experience in California as governor, I found out that you can eliminate things like that. Balancing the budget is a little bit like protecting your virtue: You just have to learn to say no. [Laughter]
BUCKLEY: You would propose to say no to future programs, or would you say no retroactively, by asking Congress to repeal some existing programs? If so, which?
REAGAN: Well now, pardon me, but you’ve just reminded me of another facet of my program that I hadn’t given as yet and I should have. Part of that program calls for a reimplementation of the Tenth Article of the Bill of Rights – the one that says the federal government shall do only those things that the Constitution calls for, and all others shall remain with the states or the people. I propose and would have already started , if your hypothesis is correct, a planned and orderly transfer back to the states and local communities of functions the federal government has usurped, and which has proven it is incapable or operating. And one of the first of those would be welfare.
One of the second would be in the field of education. I would like to dissolve the ten-billion-dollar national Department of Education created by President Carter and turn schools back to the local school districts, where we built the greatest public school system the world has ever seen. I think I can make a case that the decline in the quality of public education began when federal aid became federal interference.
Source: The Reagan I Knew, pages 120-122 [links added]
Book: The Reagan I Knew
Politico.com: Pelosi blames GOP, Bush for unemployment
Politifact.com: Will: Obama said stimulus would cap unemployment at 8 percent
Wall Street Journal: Obama Launches Rule Review, Pledging to Spur Jobs, Growth
Steelonthenet.com: World Steel Production Report
econ365.wordpress.com: Annex Table 23. Household Savings Rate
Heritage Foundation: Top 10 Examples of Government Waste (April, 2005)
gpoaccess.gov: The Constitution of the United States – Tenth Ammendment
gpoaccess.gov: Constitution of the United States: Main Page
Ashbrook Center for Public Affairs at Ashbrook UniversityWelfare Reform: Another Win For The Gipper
fkhairallah.blogspot.com, AKA Declarations: Waiting for Superman? Don’t hold your breath