Ben Smith reports that Obama is talking up Reagan again (h/t David Mizner in Quick Hits).
"What happened was Democrats had gotten complacent, had gotten fat and happy. they thought there was a government program to solve every problem. Ronald Reagan came in and said we need to break out of the old ways of doing things and create a leaner, more effective government," he said. "That was the right message then. I think that right now we went too far in the wrong direction. We can't go back to the old liberalism of the past, but [when] you are on your own economic philosophy [of] Bush and McCain doesn't work either. Let's try a new way where we apply common sense, have government do what it does well."
Let's look at the data. Did Reagan shrink government? Well, as economist Angry Bear notes, he did not. He actually increased the size of government by .2% Federal executive employees per thousand population, versus 1.17% shrinkage under Jimmy Carter and 2.80 shrinkage under Bill Clinton, both of which outpaced George W's -1.09%. In fact, the last Presidency to increase the government's size is JFK/LBJ, who under their (combined) eight year term increased government size by 2.02% a year. Even George HW Bush shrank government more than Reagan did. So why is Reagan considered a true fiscal conservative? My theory is that what he did that Clinton and Bush I did not do is reward Republican interest groups. And the data bears this out.
While he didn't reduce the size of government, what Reagan did do was transfer spending from discretionary social spending to both the military-industrial complex and interest payments on government debt. This was good for four Republican interest groups - corporate defense contractors, the military officer corps, Wall Street tycoons, and the Saudis. It also had the effect of sloshing huge amounts of money into our culture such that an entire new culture of superrich were formed. In 1982, Forbes came out with its first list of the top 400 wealthiest people in America, and the wealthiest guy had a net worth of around $2 billion. Today, that's about what you need to get onto the Forbes 400.
These new superrich are Democrats and Republicans, because Clinton was as good for them as Reagan or George W. But conservatives still believe that Reagan is a far superior President than either Bush I or Clinton or Carter? Why?
As you can see, Clinton and Bush I slashed the military. People whose jobs and wealth depend on the military didn't like that. Ergo, Clinton and Bush I weren't conservative even though they shrank government, and Reagan was, even though he didn't. Bush II increased military spending, so before his administration turned into an obvious catastrophe, he was venerated as another version of Reagan, a conservative dream.
I'm not sure why this matters. It's a total misreading of Carter's legacy, who was basically a conservative Democrat operating along very similar lines to Obama (with huge majorities entering after a disgraced Republican President). Perhaps the worry is that the conventional wisdom about how to govern is being set by Republican interest groups, and Obama is following his lead from these groups, at least rhetorically. I don't know. But I want our understanding of history to be clear. Ted Kennedy ran against Carter in 1980 because he was too conservative. Liberals just never had a chance to govern.
