0:03 welcome to our reagan revolution lecture
0:05 well in the 1980s as you can tell from
0:06 the slide by the end of this one you
0:08 should be able to explain
0:10 supply-side economics also known as reaganomics
0:11 reaganomics
0:13 and what was the purpose of reagan's
0:15 famous address at the brandenburg gate
0:16 of the berlin wall which we'll be
0:17 watching a clip of
0:20 what was the iran-contra scandal and why
0:21 did much of the nation
0:26 not want to address the hiv aids crisis
0:28 in his first inaugural address reagan
0:29 proclaimed that quote government is not
0:31 the solution to the problem government
0:34 is the problem but reagan focused less
0:36 on eliminating government
0:38 than on redirecting it to new goals his
0:40 administration embraced
0:42 supply-side economic theories so while
0:45 post-world war ii keynesian economics
0:47 had focused on stimulating consumer
0:50 demand supply side economics argued that
0:52 lower personal and corporate tax rates
0:55 would ensure greater private investment
0:56 and then production
0:57 and then the resulting wealth was
0:59 supposed to reach lower income
1:01 groups through job creation and higher
1:03 wages basically if you take less in
1:04 taxes from the rich
1:06 they will then spend that money and that
1:08 will create the economic activity that
1:11 will eventually benefit the working poor
1:12 so that's the way this is supposed to
1:14 work critics called it
1:18 trickle down economics vice president
1:20 george h.w bush had belittled it as
1:22 voodoo economics in the 1980 republican primaries
1:24 primaries
1:26 supply side conservative economist
1:28 arthur lafleur predicted that these
1:30 lower tax rates regenerate
1:33 so much extra economic activity that
1:35 federal tax revenues would actually
1:38 increase despite the lower tax rates so
1:39 what they're betting is they're going to
1:41 cut taxes but they'll actually
1:43 increase government revenue because
1:44 they're going to create so much new
1:47 economic activity with those lower taxes
1:49 so basically massive tax cuts would pay
1:51 for themselves through all this
1:52 increased economic growth
1:54 reagan touted the so-called laughter
1:56 curve as you see here
1:59 as justification for his tax cut plan
2:01 which was a departure from traditional
2:03 conservative economics remember
2:05 republicans under kennedy's presidency
2:08 had blocked tax cuts if they would add
2:09 to an already
2:11 present deficit and therefore add to the debt
2:13 debt
2:16 on march 30th 1981 reagan survived an
2:18 assassination attempt by a mentally
2:20 unstable young man named john hinckley
2:21 and public support swelled for the
2:23 hospitalized president
2:27 congress approved a 675 billion dollar
2:29 tax cut in july of 1981
2:31 with significant democrat support the
2:32 bill reduced
2:35 overall federal taxes by more than one quarter
2:37 quarter
2:39 during the 1980 campaign reagan had
2:41 sought support from organized labor
2:42 which traditionally had backed the
2:43 democratic party
2:45 all the way back to wilson the
2:48 professional air traffic controllers
2:50 organization or patco however
2:52 endorsed reagan after he reached out and
2:54 convinced the group that he was the best
2:55 politician for them
2:58 but when patko went on strike reagan
2:59 ordered the union's air traffic
3:01 controllers back to work without having
3:02 their grievances met
3:05 and he then fired more than 11 000 who
3:08 refused to return to work
3:11 reagan's actions crippled patco and left
3:13 the american labor movement reeling
3:15 his policies enhanced the economic power
3:17 of corporations and high-income
3:18 households who benefited
3:20 and congress approved reagan's request
3:23 for 1.2 trillion dollars in new military spending
3:24 spending
3:27 but this combination of lower taxes but
3:29 spending increases caused the national
3:30 debt to balloon
3:32 by the end of reagan's first term it
3:33 equaled 53
3:36 of the gross domestic product the gdp up
3:37 from 33
3:40 in 1981 which is particularly bad
3:41 because reagan had promised to curb spending
3:42 spending
3:44 and we often judge presidents based on
3:46 what they promise to do or what they're
3:47 going to try to do when they're campaigning
3:48 campaigning
3:50 versus what they try to do or actually
3:54 get done once they're in office
3:56 the united states experienced a severe
3:58 economic recession in 1981 and 82.
4:01 unemployment rose to nearly 11 the
4:02 highest percent
4:03 at that time since the great depression
4:05 and of course a lot of this is still
4:06 kind of that hangover
4:09 from the oil shocks we saw earlier in
4:11 the previous decade
4:13 reductions in social welfare spending
4:15 meant that poor americans
4:17 felt the impact of this recession far
4:19 more than they had in previous times
4:21 reagan had reduced funding for food
4:23 stamps and aid to families with
4:24 dependent children the nation's welfare
4:26 program at the time
4:27 he had removed a half million people
4:29 from the supplemental social security
4:31 program for the physically disabled
4:33 so these were people whose own doctors
4:34 and the government's doctors had
4:35 certified as
4:37 disabled but the reagan administration
4:39 made it even more difficult to qualify
4:41 for these disability payments and so
4:42 they were then
4:45 kicked off of that system then reagan received
4:45 received
4:48 bipartisan rebuke meaning criticism from
4:50 both republicans and democrats both
4:51 parties in 1981
4:54 when he proposed cuts to social security
4:56 benefits for early retirees so social
4:58 security disability he's already cut
5:00 now he's going after regular social
5:02 security and this strikes some people
5:05 as bad in part because when he
5:08 campaigned he campaigned largely
5:10 against the great society programs he
5:12 was fine with the new deal programs like
5:14 social security but now he's trying to
5:16 cut that too
5:19 the senate voted unanimously to condemn
5:20 reagan's plan
5:22 and so a humbled white house worked with
5:24 the democratic speaker of the house tip o'neill
5:25 o'neill
5:27 and in 1982 they passed a bill that
5:29 restored 98 billion dollars of the
5:31 previous year's tax cuts
5:33 democrats campaigned on the fairness
5:35 issue that reagan's policies favored the
5:37 most fortunate americans
5:39 and that those tax cuts were not paying
5:41 for themselves and certainly not paying
5:42 for the increases in spending we were
5:45 seeing during his administration
5:48 they won 26 house seats in the midterms
5:50 so we always expect the president's
5:51 party to lose seats in the midterms
5:52 that's just typically
5:55 how these things work but 26 seats is a
5:57 pretty decent loss
5:59 ever the consummate politician reagan
6:00 quickly adjusted to the political
6:02 setbacks of 1982.
6:04 he appointed a bipartisan panel to
6:06 consider changes to social security
6:08 which recommended a one-time delay in
6:10 cost-of-living increases
6:11 a new requirement that government
6:14 employees pay into the system as well
6:16 and a gradual increase in the retirement
6:19 age from 65 to 67.
6:21 congress quickly passed the bipartisan
6:23 recommendations into law
6:25 and the president also benefited from an
6:27 economic rebound unemployment dropped to
6:30 seven and a half percent in 1984.
6:32 that's still high but it's better than
6:34 it had been by a long shot
6:36 the harsh medicine of high interest
6:38 rates that had been begun by carter but
6:40 continued by reagan
6:42 had finally helped lower inflation to
6:44 three and a half percent
6:45 while campaigning for re-election in
6:47 1984 reagan pointed to the improving
6:48 economy as
6:50 evidence that it was mourning again in
6:53 america that was his slogan
6:54 most conservatives ignored the debt
6:57 increase and tax hikes and supported him
6:58 and walter mondale secured the
7:01 democratic nomination in 1984 and he
7:03 chose new york representative geraldine
7:04 ferrero as his running mate and as you
7:05 can see here
7:08 she is the first woman on a major
7:10 party's presidential ticket
7:12 mondale and ferreira suffered a crushing
7:13 defeat in the general election
7:16 check out that map where reagan won 49
7:20 of the 50 states with 58.8 percent of
7:21 the popular vote and i mentioned this
7:23 again with fdr
7:26 that even though he won the overwhelming
7:28 majority of that map
7:29 still more than a third of the country
7:31 voted against him so same thing for
7:34 reagan he wins 49 out of 50 states but
7:36 with 58 percent of the popular vote
7:38 so we shouldn't misinterpret an
7:40 electoral college map as
7:42 accurately representing the feel of the
7:46 nation in response to this 1984 loss
7:49 a group of centrist democrats formed the
7:50 democratic leadership
7:52 council to try to push the democratic
7:55 party further to the right
7:57 believing that that's what was needed in
8:01 order to win future elections
8:02 reagan entered his second term with a
8:04 much stronger mandate than in 1981
8:06 because he won those 49 states
8:09 but the gop makeover of washington stalled
8:10 stalled
8:12 reagan had wanted to end means-tested
8:14 social welfare programs meaning
8:16 assistance or aid for only the extremely
8:18 poor so means tested
8:20 means the government is looking at what
8:21 means you have do you have any money do
8:23 you have anything you could sell do you
8:25 have someone else you could go live with
8:27 rather than relying on government aid
8:29 but the democrats regained control of
8:32 the senate 1986 and they blocked several
8:33 of these measures
8:35 democrats and republicans occasionally
8:37 passed compromises which i know
8:39 today it sounds like they could never do
8:41 but they've done it like the tax reform
8:42 act of 1986.
8:44 it lowered the top corporate tax rate
8:46 from 46
8:49 down to 34 and it reduced the highest
8:51 marginal income tax rate from
8:54 50 percent to 28
8:56 it also simplified the tax code by
8:58 eliminating numerous loopholes which
9:00 were supposed to kind of raise the
9:02 effective tax rate
9:05 in 1986 reagan also signed into law the
9:08 immigration reform and control act
9:09 to address the millions of undocumented
9:11 immigrants already inside the united states
9:12 states
9:14 and to try to limit future unsanctioned migration
9:15 migration
9:18 now this law provided a path to
9:20 citizenship for undocumented immigrants
9:22 and nearly 3 million undocumented
9:25 workers received legal status
9:27 one of reagan's most far-reaching
9:29 victories occurred through judicial
9:31 appointments he named 368 district and
9:33 federal appeals court judges during his
9:34 two terms
9:36 and almost all of his appointees were
9:37 white men
9:40 seven were black 15 were latino and two
9:41 were asian
9:44 out of 368. reagan also appointed three
9:46 supreme court justices
9:48 sandra day o'connor who to the dismay of
9:49 the religious right turned out to be a
9:51 moderate but she is the first woman on
9:53 the court a major achievement
9:56 anthony kennedy a solidly conservative
9:58 catholic who occasionally sided with the court's
9:58 court's
10:01 liberal wing and art conservative
10:03 antonin scalia
10:05 now many african americans saw the new
10:06 right led by reagan
10:09 as hostile to their aspirations during
10:10 reagan's last year in office the
10:13 african-american poverty rate was 31.6 percent
10:13 percent
10:15 as opposed to 10 percent for white
10:17 americans black unemployment remained
10:19 double that of white americans and the
10:22 median income for black families was 21 000
10:23 000
10:26 42 below white households
10:29 and then when the 1965 voting rights act
10:31 came up for renewal reagan's justice
10:32 department pushed the president to oppose
10:33 oppose
10:35 any extension of it so this is the law
10:38 that makes it easier for people to register
10:39 register
10:40 even if they're in states that don't
10:42 like black people voting
10:44 only the intervention of more moderate
10:46 congressional republicans
10:48 saved the voting rights act from the
10:49 republican leadership that was becoming more
10:50 more
10:52 rigidly against black civil rights and
10:54 black voting rights
10:56 wealthy americans thrived thanks to the
10:58 policies of the new right but reckless
11:00 speculation and
11:02 deregulation drove the stock market upward
11:03 upward
11:05 right until the crash of october 19 1987.
11:06 1987.
11:10 on black monday the market plunged 800
11:11 points erasing 13
11:13 of its value investors lost more than
11:15 500 billion dollars
11:17 and an additional financial crisis
11:18 loomed in the savings and loan
11:20 industry so this is something that had
11:22 been deregulated under the reagan
11:24 administration in 1982 reagan had signed
11:26 a bill increasing the amount of federal
11:28 insurance available
11:30 to savings and loan depositors making
11:32 this type of investment more popular
11:35 but that bill also allowed snls those
11:37 savings and loan depositors to engage in
11:39 high risk loans and investments
11:41 so basically reagan offered them
11:42 government-backed insurance
11:44 for riskier investments and so they made
11:46 those riskier investments and when
11:48 they failed the federal government was
11:49 on the hook
11:52 by the late 1980s the savings and loans
11:54 industry regularly failed and the 1982
11:56 law left the government responsible for
11:56 bailing them out
12:00 at an eventual cost of 132 billion dollars
12:02 dollars
12:04 meanwhile the cold war still raged and
12:06 reagan denounced the soviet union as an
12:09 evil empire that would end up on the ash
12:11 heap of history
12:13 his reagan doctrine declared that the
12:16 u.s would supply aid to anti-communist forces
12:16 forces
12:19 everywhere in the world now remember
12:21 there's this larger argument should the
12:22 united states be supporting
12:25 anti-democratic forces as long as
12:27 they're anti-communist
12:30 or should there be more um emphasis on
12:32 human rights
12:34 and self-representation federal spending
12:37 on defense risks from 171 billion
12:41 dollars in 1981 to 229 billion in 1985
12:43 responsible for much of the increase in
12:45 federal debt under reagan
12:47 in march of 1983 reagan announced plans
12:49 for a strategic defense
12:51 initiative a space-based system that
12:53 could shoot down incoming soviet missiles
12:54 missiles
12:56 critics derided the program as a star
12:58 wars fantasy and it was more talk than reality
13:00 reality
13:02 congressional democrats opposed reagan's
13:03 policies on their merits
13:05 but some congressional republicans were
13:08 wary of his fondness for circumventing
13:10 congress for going around them
13:13 in the late 1970s nicaragua had a civil
13:14 war in which the u.s supported the
13:16 right-wing government over communist rebels
13:17 rebels
13:19 the problem was the right-wing
13:20 government's national guard engaged in
13:22 human rights abuses and
13:24 executed abc reporter bill stewart an american
13:25 american
13:28 on camera doesn't really look good for
13:29 the u.s to support a government that
13:30 does that
13:32 carter had cut off aid to this
13:33 right-wing government which eventually
13:35 lost the civil war in 1979.
13:38 the communist or marxist sandinistas
13:40 took power and they held elections
13:42 now the contras formed from members of
13:44 that old national guard that had
13:45 violated the human rights
13:48 and they fled to honduras and received
13:49 funds from the cia
13:51 they were also involved in trafficking
13:53 cocaine that's the other way they made money
13:54 money
13:56 so the contras launched a campaign of
13:58 terror to disrupt the new elected
13:59 government attacking and destroying
14:01 health centers and schools
14:04 with u.s government support so congress
14:05 once again says this looks
14:07 terrible the us government is funding
14:11 terrorism so in 1982 the house voted 411-2-0
14:12 411-2-0
14:14 to approve the boland amendment which
14:16 barred the u.s from supplying
14:17 funds to the contras in their fight
14:19 against the communist sandinista
14:20 government in nicaragua
14:22 so congress says even if they're
14:23 fighting communists we cannot support
14:25 these people because of their human
14:28 rights abuses and their terrorism
14:30 reagan overlooked the country's brutal
14:32 tactics and terror attacks because they
14:34 opposed communism he held them as the quote
14:35 quote
14:38 moral equivalent of the founding fathers
14:40 at the same time saddam hussein's iraq
14:42 had invaded iran
14:44 now the reagan administration did not
14:46 want either of those nations iraq or
14:48 iran to secure control of the entire oil rich
14:49 rich
14:52 region so they aided both sides of that war
14:52 war
14:54 at first when iran looked like it would
14:56 face imminent defeat
14:58 the administration provided secret arms
15:01 deals to iran which they also used to
15:03 get around that boland amendment and congress
15:04 congress
15:05 and all those laws preventing aid to the
15:07 contras so this is how it worked
15:09 national security advisor robert
15:11 mcfarland and national security council
15:12 member oliver
15:14 north raised money to support the
15:16 contras by selling american missiles to iran
15:17 iran
15:19 and then funneling the money to the
15:21 contras in honduras
15:23 later when iraq seemed on the verge of
15:24 defeat the reagan administration had the
15:26 cia give them high-class intel including
15:28 satellite imagery of the iran-iraq border
15:29 border
15:31 and they allowed american-made arms to
15:32 be sold in baghdad
15:34 so the u.s will aid both sides of that
15:36 war to keep it going
15:38 so that neither side wins control of
15:40 that entire oil-rich region and
15:42 the reagan administration uses that conflict
15:43 conflict
15:46 to have iran basically give american money
15:47 money
15:48 to the contras in violation of the
15:50 boland amendment
15:52 so the illegal iran-contra scheme was
15:54 revealed in 1986
15:55 and the president's underlings had
15:57 violated the boland amendment and made a
15:59 mockery of reagan's declaration that
16:00 america will never make concessions to terrorists
16:02 terrorists
16:03 so remember they're literally funding
16:05 terrorists in nicaragua
16:06 and they're also paying money to the
16:08 iranian government that had been holding
16:09 americans hostage
16:12 just two years earlier while the iran
16:14 contra affair generated comparisons to
16:16 the watergate scandal
16:18 investigators were never able to prove
16:21 reagan knew about the operation
16:22 and we'll be hearing more about that in
16:24 just a minute so
16:25 now you're going to proceed to the next
16:27 two clips in the lecture the first is
16:29 this satirical song remember
16:32 our definition of satire making fun of
16:33 the iran contra affair
16:36 is from the cartoon american dad how
16:37 often do you get to watch cartoons in class
16:37 class
16:40 enjoy uh the second is reagan's most
16:42 famous speech at the brandenburg gate
16:43 where kennedy gave his ich bin ein
16:44 berliner speech
16:46 so take a look at those two and then
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