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Stock Ideas Investors Daily Edge The Personal Responsibility and Work Opportunity Reconciliation Act
Stock Ideas Investors Daily Edge The Personal Responsibility and Work Opportunity Reconciliation Act 
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| The Personal Responsibility and Work Opportunity Reconciliation Act |
| Thursday, 04 September 2008 | ||||||||
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It’s post Labor Day and I’m still feeling a nice languor. I happily fiddled around and attempted to organize some old files Monday—nothing too strenuous. You always hope that past thoughts don’t look too flimsy years later, but I came across one that seems to hold up and look downright timely. With John McCain taking up the Republican banner as the party’s presidential candidate this week, I thought reflections on the last western-state Republican president would be useful today. We’re just beginning to discover what Ronald Reagan really brought to us as history untangles biography from fandom. Now what might the newest westerner, John McCain, do? This as it turns out, does have a link to our investment world because the outcome of the next election may well affect issues having to do with government oversight as well as taxes, budgets, dollar strength and the economy. So let me repeat observations from June 2004 following the death of President Ronald Reagan: Something About President Reagan I Haven’t Heard Anyone Say By now, everyone else has said so much about President Ronald Reagan, some quite eloquent, that I have little to add to his resume. You know what it is. Reagan’s impact on the U.S. and the world was huge. But eventually, I think history books will put it in perspective, and the message probably won’t match a lot of what was said last week. Frankly, Communism was an unsustainable model and Russia was on a course to inevitable self-destruction anyway. The problems dated back to the Brezhnev years of the 1970s when Russia was already unable to feed itself without massive foreign aid. Its lunar missions were failures. It was losing its grasp on its satellite countries. Its scientific advances were stalling as it kept aloof from sharing insights with the rest of the world. Its leaders were already corrupt and hoarding the country’s wealth and privileges for themselves.
It had to scale back its five-year economic plans from earlier more ambitious models, and then failed to meet those lower goals. Fewer high school students were going on to college in the 1970s and early 1980s than in the 1960s. This is not to take anything out of President Reagan’s cabinet of trophies, dear reader. I think the much-talked-about defeat of communism will prove to be far from Reagan’s greatest accomplishment. The real change that Reagan wrought will last much longer and is much greater. He changed how we think about government and more important about responsibility. Reagan’s greatest imprint, I believe, will be in bringing the Western attitude into public life. I speak not of Western meaning “Europe and America as opposed to Asia.” I mean Western as in the place where the wagon trains went and they made cowboy movies. Malcontents Breed Independence There’s a theory of U.S. history called the Turner Thesis (not to be confused with the Turner Diaries!) that applies here. In a nutshell, in 1893, Frederick Jackson Turner theorized that the United States developed as it did because its misfits, malcontents, dreamers, nuts and independents continually escaped the bounds of convention by moving westward. Their children became civilized and conventional, then the next group pushed farther west to find space to be free again. This huge frontier we once enjoyed continually replenished the idea of democracy and freedom in U.S. history. Anyone who has traveled or lived in both the East and the West can tell you that Easterners and Westerners are different. On the surface, Westerners seem more easygoing, friendlier and less stuffy than we Easterners do. I am sure, for instance, that I wore proper white gloves to church and dances 10 years after my California cousins had thrown theirs away. My mother, a transplanted Californian, complains that after living in Maryland for 50-some years, she’s still an outsider, the “girl Jimmy married.” And it’s true. I’m a Marylander; so are my brothers. And though everybody loves her, Mom’s not. Below the surface, beneath that refreshing casualness, though, Westerners are much less apt to put up with anyone interfering in their business… and their business is whatever they want to do. And they expect you to take care of your business, too. Responsibility and freedom are personal. When Reagan came to office, the top marginal tax rate in the United States was 70%. Today, that’s unthinkable. His greatest accomplishment wasn’t that he reduced taxes. It was that he permanently changed what taxes we find acceptable. He literally shook us until our heads rattled. When Reagan came to Washington, having already made his imprint in California, he was a rebel. Apart from a few overtaxed rich, you didn’t find a groundswell of Eastern umbrage railing against those rates. Just a few “crazies.” The revolution in taxes, and what government was entitled to take, came from the West. So did a new outlook on what government was supposed to do. Let me give you an idea of how much the ideas Reagan brought with him changed national politics forever. Think of the president that fervent Reagan admirers most dislike. The one who is the most diametrically opposite you could imagine. Yep, that one… Now ponder this. Bill Clinton could never have signed off on the welfare reform bill known as the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 if Ronald Reagan hadn’t been president long before him. Continued....
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