Posted on: Tuesday, June 8, 2004

Reagan's legacy remains indelible

By Adam Geller
Associated Press

NEW YORK — As president, he crushed one of the few labor unions whose endorsement he won as a candidate.

He marshaled sweeping economic reforms, motivated partly by a grudge over whopping tax bills he incurred as a film star.

President Ronald Reagan's agenda for the economy and business was wide-ranging and far from subtle. But those broad brush strokes of policy helped redefine economic conservatism and recast government's relationship with business and labor in ways that are still in effect today, experts say.

"We live in the wake of Reagan's reforms," said Jules Tygiel, a history professor at San Francisco State University.

Nearly two decades after he left office, Reagan's lasting impact on business is one of the few things that both sides of the political aisle can agree on.

His policies still provoke debate, whether about the aggressive tax cuts and deficit spending of Reaganomics, the embrace of deregulation and pullback from corporate and environmental policing, and an aggressive stance against organized labor.

History has not proven that Reagan's ideas were right or necessary, but their import is demonstrated by the fact that the discussion is nowhere near over, economists and scholars say.

"There's no question that it was a fundamental turning point," said James K. Galbraith, a University of Texas economist who led the Joint Economic Committee of Congress during the administration.

Until Reagan arrived in Washington, the political debate largely cast fiscal conservatives and their demands for balanced budgets against liberal thinkers who favored the use of deficit spending as a means for reaching full employment.

But the debate was reshaped by an administration that drew together two groups from the periphery who put little priority on controlled spending — "supply siders" who argued that lower tax rates would spur people to work harder, save and invest and economists who said the key was to control inflation.

Their arguments helped provide Reagan — determined to cut taxes and increase defense spending — with the economic rationale for doing both.

One of Reagan's boldest economic moves was his facedown of the Professional Air Traffic Controllers Association.

Because they were government employees, their 1981 strike was illegal. But the union — who had endorsed Reagan — gambled with a strike.

But when the union refused to send workers back, he fired them. The move set a bold new tone for businesses in the way they negotiated with unions.

That set off a snowball effect partly responsible for a long decline in union membership.

"Reagan came in with a clear-cut economic program and the consequences of that are what we live in," Tygiel said.