Reaganomics + Dennis Smith

Dennis Smith
6/21/10
NK 6
Interview Blog

The subject of my research was Reaganomics. Since this topic can get very heated between people with differing opinions, I thought that I would interview people from both ends of the spectrum. I think that this gave some balance and perspective as to why people did or did not support Reagan’s policies. Finally I interviewed my uncle, who was an important businessman at the time. I was hoping that this would give perspective as to the point of view of a businessperson experiencing the tax cuts and other reforms of Reaganomics.




Dennis Smith
6/17/2010
Interview #1
Reaganomics interview with my Dad, Brian Smith
Interview on 6/4/2010
I interviewed my dad, Brian Smith. At the time of my topic, he was in his early 20’s as a young college student in Greeley, Colorado. He is fairly conservative and is a staunch supporter of supply-side economics. We currently live in Seattle, WA.
Me: As a young man during the 1980’s, did you observe any changes in the economic climate at the time?
Dad: Absolutely. At the time I did not have much money, and during the Carter administration I could barely afford gas. It was really nice to have such big tax breaks as well. It made it a lot easier just to afford food, gas, and my apartment, especially in the early 80’s while I was in college in Greeley, Colorado. I think that the tax breaks greatly helped a lot of Americans as it ushered in a lot of growth over the 1980’s.

Me: Did you approve of the plan to shrink government size through lower taxes and supple-side economics?
Dad: Yes. All throughout the 60’s and 70’s there was way too much government involvement in the economy. Clearly Big Government wasn’t working in the 1970’s, so I was excited to see a more free market occur in the 1980’s. I think it was very successful for both individual citizens and for the government. The lower taxes increased individual income, which often pushed people into the next tax bracket. Since people made more money, they could pay more in taxes, and returns were high despite the tax cuts. It worked all around I think.

Me: What were your opinions on the increase in defense budget during Reagan’s administration?
Dad: It was thanks to Reagan’s defense spending that we won the Cold War. His tax cuts bolstered our economy, which let us afford to produce more weapons. We lead innovation with the most advanced weapons on Earth. Our Harrier Jets and B-2 bombers were unmatched. The Soviets were clearly falling behind in weapons development and production. They had to give up and admit defeat or try to keep up with us. They tried, but they economy, which was supporting many wars and Communist nations, could not keep up. They couldn’t afford the expansion in the arms race, so their economy collapsed upon itself. It was a unique way of fighting the war, but Reagan won, so I would definitely approve of his spending policies.

Me: Do you think Reaganomics would be successful today?
Dad: I definitely think that it couldn’t hurt, but it could use a little tweaking. With our current recession, I think that tax breaks would be very beneficial. At this time it would decrease government revenue, but that could be made up by selling public industries, such as the liquor stores in Washington State. I think that even now, a more free market economy would work very well.




Dennis Smith
6/17/2010
Interview #2
Reaganomics Interview with my Aunt, Mary Pottier
Interview on 6/11/201
I interviewed my Aunt, Mary Potteir. She is now 59, and at the time of my topic, was a taxpayer living in the United States during her early 30’s. She is very liberal in is very opposed to the economic policies enacted in the 1980’s. She currently lives Vancouver, BC.
Me: Living in the 1980’s, did you think that the tax cuts, which were central to Reaganomics, were beneficial to the economy at the time?
Mary: I think that it was a very shortsighted plan. While giving tax breaks to the public quickly increased revenue, it significantly lowered government revenue. Also the tax breaks mostly benefitted the rich while giving a larger tax burden to the poor. I will admit that it was nice to have more money, but I knew that the whole process was only hurting the nation. I think in general we needed a strong government at the time, especially with the Cold War going on at the time. A laissez-faire economy could easily fail, and free market policies led to the Great Depression, which would have been fatal during the Cold War. Mostly, the tax cuts were of little help to the nation and weakened the government at a critical point.


Me: What do you think of the increase in defense spending during Reagan’s two terms in office?
Mary: I think that he was a warmonger and it was a complete waste of money. Not only did it break détente, but it really re-ignited the conflict again, especially in Afghanistan. We spent so much money on weapons and nukes that we could destroy the entire world hundreds of times. Reagan just wanted to look like he was stronger than the Soviets, but he just looked like a violent and immature leader.

Me: So you would not credit Reagan with winning the Cold War?
Mary: Absolutely not. I would say he actually jeopardized our chances of peace in the early 80’s by breaking détente and producing weapons again. He even poised us for failure by lowering tax revenue in case we needed a really strong government if things got worse. Reagan just got to watch as the Soviet Union collapsed under its own weight. If anyone was the good guy here, it was Gorbachev. He realized that there were problems with their system, and slowed the warring as a result. He also allowed people to express their opinions of the Soviet Union through Glasnost. While the Cold War ended because the Soviet Union fell apart, I would probably credit the victory to Mikhail Gorbachev. Reagan was just a witness.

Me: Do you think that supply-side economics would work to day, especially during our current recession.
Mary: Absolutely not. Free market got us in this mess. It allowed for irresponsible and unregulated corporations to take advantage of the system and send us into a recession. Now we need a stronger government than ever, and taxes will fund the institutions that will lift us out of the recession. Reaganomics would be an absolute bust today, even more than it was in the 1980’s.



Dennis Smith
6/17/2010
Interview #3
Reaganomics Interview with my Uncle, Warren Franklin
For my third interview, I talked to my uncle, Warren Franklin. At the time of my topic he was working at Lucasfilm and experiencing firsthand the economic changes for business during Reaganomics. By the late 1980s, he was one of two Vice-Presidents of Lucasfilm. He now lives in Vancouver, BC as the CEO of Rainmaker Studios. He originally moved to British Columbia because they offered many tax benefits to the movie industry as an enticement for studios to move there.
Me: Being that you were the VP of a major movie studio during the tax cuts and free market economy of Reaganomics, how did that affect your industry?
Warren: The tax cuts helped majorly with film budget and revenue from a major release. We kept far more of the income from the second and third Star Wars films because of the lowered taxes. It was amazing working on those films, and it was great to see the difference from the first movie to the second and third. The better economy overall made it much easier to produce the movies and for people to enjoy them.

Me: Do you feel this way, despite the knowledge that the decrease in taxes lowered government size and tax revenue?
Warren: I know that this occurred, but the economic plans enacted at the time clearly worked. Business was booming at the time and I don’t think that it was necessary to have Big Government if business was doing just fine without it. I supported Big Government before, and I was not a fan of Reagan’s weapon stockpiling, but I think that what he did at the time for the economy was really good.

Me: So you disapprove of the stockpiling of weapons in the arms race against Russia?
Warren: Yes. I know that we were in the Cold War, and defense spending is natural, but such a large increase in the defense budget is unnecessary and reckless. I think that what was done for our economy was great, and that should have been the focus. Rather than spending more on weapons, maybe he could have used the improved economy to help the homeless or impoverished. I don’t think that it was the best plan, but I think that I can live with it considering the bolstered economy.
Me: Do you think that Reaganomics would be successful today?
Warren: To some degree, yes. From a business perspective, tax cuts are almost always good. It allowed for increased revenue and less money loss in taxes. I would really appreciate this nowadays, but I think that privatizing public industries is unnecessary. I also think that a bigger government could be beneficial to help us out of the recession, but business tax breaks could really help the affordability of small and startup businesses which are a great help to the economic health. I think that some aspects of Reaganomics would be a great help today, but we could definitely do without the defense buildup.