Actor turned Calif. governor? Absurd

Although much of the discussion of his career has rightly focused on his presidency, Reagan’s eight years as governor of California provide important insights into his worldview and governing style.

Lou Cannon, a longtime Reagan watcher and retired Washington Post reporter, effectively fills that vacuum in Governor Reagan: His Rise To Power. Published when another example of silver-screen machismo is attempting to win the California governor’s mansion, this lively book is thorough and balanced and places Reagan’s governorship in its broader historical context. Cannon’s fondness for and admiration of his subject do not prevent the book from addressing Reagan’s weaknesses as well as his strengths.

Though much of the material has been reported before, Cannon points out how events and traits that were evident during Reagan’s acting career and governorship provide a preview of his approach to the presidency. For example, Reagan’s detached management style, which caused him problems in the White House, was already apparent in Sacramento, when he agreed to the dismissal of his chief of staff after other aides forced the governor’s hand.

Cannon succinctly describes Reagan’s approach to governing: “Directors appreciated Reagan because he was punctual, memorized his lines, and did what he was told. He behaved similarly in the governor’s office, where he was the putative director. … Reagan had core beliefs and values, a welcome fearlessness, and a capacity for decision making. But he rarely reached out and even more rarely initiated a course of action.”

That style, coupled with his “aw, shucks” demeanor, prompted many people — in both parties — to underestimate Reagan’s resolve, to say nothing of his political fortunes. The political graveyards are filled with people who longed for the opportunity to run against the candidate they disparaged as a “right-wing former actor.”

Reagan was no accidental politician. While he was governor, 1967 to 1975, he showed himself to be skillful at both sticking to his guns and mastering the art of compromise.

Cannon is at his best when he takes readers behind the scenes as key decisions were made. He was given unprecedented access to detailed minutes of Reagan’s staff and cabinet meetings during his Sacramento years. During a 1967 discussion of a 16 percent cut in the work force of the state’s mental hospitals, to close a budget gap, Reagan showed both his compassion and pragmatism:

“I’d like to hide. It has nothing to do with the economy, but reminds me of my father who got his slip on Christmas eve,” Reagan said. “On the other hand, if you fellows tell me that we don’t need these employees, I don’t see what else we can do.”

Cannon chronicles in considerable detail the legislative maneuverings over, and Reagan’s vacillation about, a bill he ultimately signed to make abortion more accessible in California. Political junkies will find the descriptions of the give and take fascinating and will marvel at Reagan’s once-liberal views on the subject. The extensive discussion of the growth of the women’s rights movement helps readers understand the historical backdrop against which the abortion debate occurred.

The author’s sense of the big picture also is apparent when he describes the liberal activism at the University of California and other campuses in the 1960s. Reagan’s frustration with those activities prompted him to help engineer the ouster of controversial University of California President Clark Kerr. Reagan’s determination foreshadows the stubbornness he showed as president during his support for the Nicaraguan opposition forces and his firing of the striking air traffic controllers.

The reader also learns much about Reagan’s character and political acumen from Cannon’s descriptions of the governor’s relations with assembly speaker and future gubernatorial candidate Jesse Unruh (D). Cannon devotes a full chapter to that tempestuous relationship, drawn heavily from his 1971 book Ronnie and Jesse: A Political Odyssey, and Unruh pops up often in the remainder of Cannon’s newest book.

Cannon’s penchant for clever phrasemaking is evident when he describes Unruh as “alternately principled and devious, sophisticated and crude, thoughtful and impulsive, visionary and myopic.”

Though Cannon’s writing is generally elegant, he sometimes shows a flair for the obvious with such phrases as “Ronald Reagan was determined to succeed as governor.”

He also occasionally focuses too much on arcane details, such as a lengthy discussion of an internal Republican fight over the selection of a state Senate majority leader.
Those shortcomings, however, are vastly overshadowed by the keen insights, fine writing and intricate details in Cannon’s portrait of the pre-presidential years of Reagan’s life. Governor Reagan: His Rise to Power is a valuable tool for those interested in better understanding the origins and extent of his political acumen.

Claude R. Marx is a freelance reporter who has written extensively about national and state politics.

BOOK REVIEW
How the New Deal was a bad deal for the U.S. economy
Author picks apart FDR’s policies
By George J. Viksnins

Jim Powell, a senior fellow at the Cato Institute since 1988 and editor of Laissez Faire Books, has produced a carefully documented study of the Great Depression decade.

In FDR’s Folly: How Roosevelt and His New Deal Prolonged the Great Depression, Powell debunks most arguments advanced by such FDR hagiographers as James McGregor Burns and Arthur M. Schlesinger Jr.

The typical American high-school history text probably identifies excessive stock-market speculation and unsound banking practices, as well as abuses of the public trust by “the malefactors of great wealth” as the main causes of the downturn in the American economy. The standard view of events probably blames Hoover for ineffectual government policies and presents New Deal reforms in a favorable light, largely ignoring the fact that government actions caused a large second collapse in 1937-38.

The Federal Reserve twice raised reserve requirements on bank deposits (to “mop up” gold flowing to the United States as war fears loomed), and the budget deficit fell from $4.4 billion in 1936 to $1.2 billion in 1938 as Social Security taxes were being collected and no one was yet receiving benefits.

Looking back at the last century, two events stand out as major shocks for the plutocrats, the moneyed creditor class, which benefited from the mild deflationary bias of the gold standard.

The first of those events, of course, is obvious — the 1917 October Revolution in Russia (Lenin said gold would be used to make floors in public toilets). The second massive dislocation is less obvious but is well-documented in Powell’s book.

The fulcrum of the gold standard was a fixed price of gold, guaranteed by the “Old Lady of Threadneedle Street,” the Bank of England, at $20.67 per ounce. That led to stable exchange rates (the British pound at $4.87 until 1931) as well as low interest rates, greatly facilitating foreign trade and investment. Any doubt about a paper currency would lead to a gold outflow from the country in question; many long-term financial instruments had “gold clauses,” enabling the creditor to demand payment in gold.

FDR destroyed the “ancien regime.” The dollar was devalued by raising the official gold price to $35, and gold clauses were abolished by a joint resolution of Congress on June 5, 1933. The central role of gold in international monetary arrangements was abolished, though some vestiges did remain in the Bretton Woods system, established with the International Monetary Fund in 1944.

A lot of interesting material is at hand: FDR was “utterly ignorant of economics” (Page 4). He chose Henry Wallace, “the unemployed editor of an Iowa farm magazine,” to run the country’s agriculture (Pages 113-114). Wallace ordered the plowing up of 10 million acres of farmland and the slaughter of 6 million baby pigs. Peaches were left to rot in California orchards, despite the serious hunger problem, vividly described in John Steinbeck’s 1939 book The Grapes of Wrath. The National Industrial Recovery Act legalized price fixing and distributed “Blue Eagles” reminiscent of Mussolini’s fasces and Hitler’s swastikas.

Although it was eventually declared unconstitutional, a lot of damage was done.
Bank failures during the Depression were caused not by excessive speculation but by the unit banking system, which prohibited branching in many states; the United States had more than 30,000 independent banks at the beginning of the decade.

The establishment of the Social Security system as a pay-as-you-go government monopoly was a bad idea, as was deposit insurance, costing American taxpayers more than $500 billion in the savings-and-loan bailout (lower estimates do exist, however).

The Fair Labor Standards Act of 1938 led to massive job losses, especially for blacks. Taxes as a percentage of national income doubled under FDR, and the maximum tax rate was raised to 75 percent in 1935.

The author appears to be a great admirer of Milton Friedman and reiterates support for a money-growth rule, even though Friedman himself has modified his position (see Alan Reynolds in the Sept. 1 National Review).

The book will probably be better-liked among card-carrying members of the vast right-wing conspiracy than among progressives in academia and media circles.

George J. Viksnins is a professor emeritus of economics at Georgetown University.