Analyzing Primary Sources Activity Ronald Reagan s Inauguration Background When Ronald Reagan was sworn in as the fortieth president of the United States, the country was facing several crises. The economy remained weak, the United States appeared weakened internationally, and although the Iran hostage crisis had finally ended after 444 days, Americans still felt the sting of that humiliation. When Reagan stood to deliver his first inaugural address, Americans were looking for reassurance, and Reagan did not disappoint. Directions: Read the following excerpt from Reagan s first Inaugural Address. Then answer the questions that follow. In this present crisis, government is not the solution to our problem; government is the problem. From time to time we ve been tempted to believe that society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people. Well, if no one among us is capable of governing himself, then who among us has the capacity to govern someone else? All of us together, in and out of government, must bear the burden. The solutions we seek must be equitable, with no one group singled out to pay a higher price. We hear much of special interest groups. Well, our concern must be for a special interest group that has been too long neglected. It knows no sectional boundaries or ethnic and racial divisions, and it crosses political party lines. It is made up of men and women who raise our food, patrol our streets, man our mines and factories, teach our children, keep our homes, and heal us when we re sick professionals, industrialists, shopkeepers, clerks, cabbies, and truck drivers. They are, in short, We the people, this breed called Americans.... We have every right to dream heroic dreams. Those who say that we re in a time when there are not heroes, they just don't know where to look. You can see heroes every day going in and out of factory gates. Others, a handful in number, produce enough food to feed all of us and then the world beyond. You meet heroes across a counter, and they re on both sides of that counter. There are entrepreneurs with faith in themselves and faith in an idea who create new jobs, new wealth and opportunity. They re individuals and families whose taxes support the government and whose voluntary gifts support church, charity, culture, art, and education. Their patriotism is quiet, but deep. Their values sustain our national life.
Analyzing Primary Sources Activity Cont. Now, I have used the words they and their in speaking of these heroes. I could say you and your, because I m addressing the heroes of whom I speak you, the citizens of this blessed land. Your dreams, your hopes, your goals are going to be the dreams, the hopes, and the goals of this administration, so help me God. Critical Thinking 1. Why do you suppose Reagan named government as the source of the nation s ills? 2. How would you summarize the theme of the second paragraph? What is its purpose? 3. Why does Reagan speak of ordinary Americans as heroes? 4. What is the underlying message of the last paragraph?
NAME DATE CLASS Economics of History Activity Conservatism and Government Involvement in the Economy The New Deal ushered in an era of liberal politics and economics in the United States. By the end of the 1970s, however, U.S. economic problems unemployment, inflation, and the energy crisis had led to dissatisfaction with the government, particularly the government's role in the economy. Economics Terms to Know free enterprise system in which business is governed by the laws of supply and demand, not restrained by government interference transfer payments government programs that transfer wealth from the rich to those who are less wealthy The dissatisfaction many Americans had with the country's economic problems in the 1970s revitalized support for conservatism. Although the gross domestic product (GDP) members of the new conservative coalition were the total value of goods and concerned with many different issues, they were services produced by a country in held together by a common belief that U.S. society a year had somehow lost its way and that the government was largely responsible. As Ronald Reagan put it, "In the present crisis, government is not the solution to our problem; government is the problem." Federal Debt as a percentage of GDP Federal Spending as a percentage of GDP 193 1949 1942 1945 1958 1951 1954 1967 1960 1963 1966 1979 1972 1975 1988 1981 1984 1997 1990 1993 1996 2009 2002 2005 8 PERCENTAGE 150% 140% 130% 120% 110% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Federal Spending and Federal Debt as a Percentage of GDP, 1939-2008 YEAR The conservative economic theory holds that when the government regulates the economy, it makes the economy less efficient, resulting in less wealth and more poverty. Conservatives believe that free enterprise is the best economic system, and they argue that if people and businesses are free to make their own economic choices, there will be more wealth and a higher standard of living for everyone. For this reason, conservatives generally oppose high taxes and transfer payments. They believe that taxes and government programs discourage investment, take away people s incentive to work hard, and reduce the amount of freedom in society.
Economics of History Activity Cont. The graph shows federal spending and federal debt as a percent of gross domestic product (GDP). The comparison of spending and debt to GDP measures how much of the nation s economy is represented by government activity. Applying Economics to History 1. What economic factors contributed to the revitalization of conservatism in the United States during the 1970s and 1980s? 2. Why do you think the amount of government spending was a concern to conservatives? 3. Why do you think the national debt as a percentage of GDP declined from the late 1940s through the early 1980s and then began increasing again from the 1980s through the mid-1990s?
Economics of History Activity Prosperity and Income Distribution The American economy was plagued by stagflation during the 1970s and early 1980s. President Reagan believed that the solution to America s economic problems was a combination of monetarism and supply-side economics that was dubbed Reaganomics. The president encouraged the Federal Reserve to keep interest rates high to reduce the amount of money in circulation, thus controlling inflation. He also pressed Congress to cut taxes to give businesses and investors more capital to make new investments, thus growing the economy in the theory of supply-side economics. Reagan and his followers believed that these policies would produce more wealth, which would trickle down to middle-class and poor Americans through increased prosperity for the nation as a whole. By the beginning of 1984, the American economy had revived. Consumer spending was on the rise again, and stockbrokers, speculators, and real estate developers were making multimillion-dollar deals, buying and selling hundreds of companies. Economics Terms to Know supply-side economics economic theory that lower taxes will provide more money to businesses and individuals, which they will then invest, and so boost the economy merger the combining of two or more companies acquisition a corporate action in which a company buys most, if not all, of the target company's ownership income disparity the extent to which household or individual income is distributed in an uneven manner real income the amount of income after adjusting for inflation Stock prices began to soar as a result of these mergers and acquisitions, as well as the record profits being reported by many companies. PERCENT CHANGE 25 20 15 10 5 0-5 -10-15 -20-11.6 CHANGE IN SHARE OF AGGREGATE INCOME FOR HOUSEHOLDS, 1980 1992-8.7-6.5-2.8 7.3 Lowest Second Third Fourth Highest QUINTILE 17.7 Top 5 Percent Source: U.S. Census Bureau, Current Population Survey, March 1981 and 1993.
Economics of History Activity Cont. The rapid economic growth of the late-1980s spurred by Reagan s economic policies mostly benefited middle- and upper-class Americans, resulting in a rise in income disparity. From 1967 to 1986, the amount of money earned by the top 5 percent of Americans had fluctuated between 15.6 and 17.5 percent of the nation s total income. In the late 1980s, their share of the nation s income began to rise. By the mid-1990s, the top 5 percent of Americans earned well over 21 percent of the nation s income. The growth of the top 5 percent was unmatched by other groups. Only the top 20 percent of Americans saw an increase in real income between 1980 and 1992. The bottom 80 percent all saw decreases, with the biggest decline experienced by the poorest 20 percent of the nation. Applying Economics to History 1. What does the graph of household income demonstrate took place between 1980 and 1992? 2. Do you think there is a connection between Reagan s economic policies and the changes shown in the graph? 3. Why do you think stock prices rose steadily at the same time that income disparity increased?
Analyzing Primary Sources Activity Who Won the Cold War? Background Many people have credited Ronald Reagan and his hard-line stance for ending the Cold War. In fact, relations between the Soviet Union and the United States did improve during Reagan s second term in office, and the Soviet Union did collapse shortly after the end of Reagan s presidency and during the term of the next Republican president, George H. W. Bush. But did Reagan win the Cold War, or did the Soviet Union lose it? The two primary sources below explore that debate. Read both sides of the argument and decide for yourself. Directions: Read the following primary sources. Then answer the questions that follow. The suggestion that any Administration had the power to influence decisively the course of a tremendous domestic political upheaval in another great country on another side of the globe is simply childish. No great country has that sort of influence on the internal developments of another one.... The more America s political leaders were seen in Moscow as committed to an ultimately military rather than political resolution of Soviet-American tension, the greater was the tendency in Moscow to tighten the controls by both party and police, and the greater the braking effect on all liberalizing tendencies in the regime. Thus the general effect of the cold war extremism was to delay rather than to hasten the great change that over took the Soviet Union at the end of the 1980s.... Nobody no country, no party, no person won the cold war. To the Editor: from The G.O.P. Won the Cold War? Ridiculous, George F. Kennan, The New York Times, October 28, 1992 In The G.O.P. Won the Cold War? Ridiculous (Op-Ed, Oct. 28), George F. Kennan states that neither political party can claim credit for victory in the cold war: it belongs to the people who resisted Communism, to Americans of both parties willing to bear the human and material costs, to their allies. Mr. Kennan characterizes as childish the notion that United States policies could have decidedly affected domestic Soviet affairs because no great country has that sort of influence on the internal developments of any other one. This statement is astonishing for two reasons: (1) It was the fundamental premise of Mr. Kennan's recommendations of the 1940 s that containment would encourage an internal implosion in the Soviet Union. As he expressed it in the famous Mr. X article of 1947, it is entirely
Analyzing Primary Sources Activity Cont. possible for the United States to influence by its actions the internal developments, both within Russia, and throughout the international Communist movement. (2) In the same breath in which he now denies we had the ability to promote the collapse of Communism, he blames alleged American belligerency for the tightening of party and political controls in the Soviet Union during the cold war. For no obvious reason, we could exert an influence on the internal course of the Soviet Union, but only of a baneful nature. In the 1970 s and 80 s Mr. Kennan repeatedly warned that the cold war was leading to World War III. Happily, he was wrong. Rather than concede this, he now blames us for having prolonged the cold war. He is at odds with the historical record, the views of those who administer today s Russia and his own previously held opinions. Richard Pipes, Baird Professor of History, Harvard University, The New York Times, October 29, 1992 Critical Thinking 1. What is the reasoning behind George Kennan s statement, Nobody no country, no party, no person won the cold war? 2. What does Kennan believe delayed the end of the Cold War? 3. Why does Richard Pipes express astonishment over Kennan s statement that no great country has that sort of influence on the internal developments of any other one?