Memo To: The Iowa Caucus Survivors
From: Jude Wanniski
Re: Reagan in 1980
On the eve of the Iowa caucuses in 1980 I spent three days with Ronald Reagan in California helping him and his political team get ready for the GOP primaries. I'd been thinking about those old days as I watched political pundits over the weekend recall how Reagan lost the Iowa caucuses to George Bush, by about three percentage points, and how three weeks later he skunked Bush by 27 percentage points after starting out 15 points behind after the Iowa results. Reagan's campaign manager John Sears had decided to bypass a serious effort in Iowa and had skipped the January 5 GOP debate in Des Moines. Sears reckoned the high probability that the Gipper would lose in Iowa because it was a caucus state that favored Bush, the Establishment candidate. (Only three of Fortune 500 CEO's surveyed said they were for Reagan in the issue that came out that week.) Also, Bush had been in Iowa 44 times in the previous year while Reagan had made few appearances. Instead, Sears wanted Reagan to prepare himself intellectually for the primaries that would follow and was responsible for me being at the sessions to help in that assignment. Sears' strategy worked brilliantly, but he was fired on the day of the New Hampshire primary when his detractors, including Nancy Reagan, decided he had failed Reagan by not campaigning in Iowa. I'm fairly sure Reagan would not have won if it were not for Sears, but that's another story.
Here, though, is a letter I sent to my clients on January 5, 1980, "With Reagan in California." With the New Hampshire primary now only a week away, you won't have time to read it, I'm sure, but I think it helps explain his success that year and in the eight years that followed:
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With Reagan in California
On January 2-4, Ronald Reagan held three days of policy briefings at his headquarters in Los Angeles. The purpose was not only to tune up RR, going into the serious stage of the primary campaign, but also to outline the issue orientation for the primary and general election -- not in hard and fast terms, but in a rough way give the folks at the center of the campaign a common view of what everyone else was up to inside the RR organization. On January 2, there were three hours on agriculture, from 2 p.m. to 5 p.m., with some spillover into energy-related topics. (I did not attend this session, arriving in L.A. just as it ended.) The second day, from 9:30 a.m. to 5:45 p.m., was devoted to foreign and defense policies. The final session, Friday the 4th, was devoted to economic policy and energy and lasted from 9:30 a.m. to 6 p.m. I attended these two full-day sessions.
These were not action meetings, in that they were not meant to produce on-the-spot decisions or conclusions. They were, though, extremely lively, with a wide range of views represented on most topics. It would be improper for me to report on details of the discussions, and I took no notes, but the ground rules were not drawn so tightly that I cannot share my general impressions with you. For the record, I will send a copy of this FYI to the Reagan headquarters.
Participants: There may have been 30 people in all involved in the exercise, but because some attended selected sessions, there never seemed to be more than 20 in the room at once. RR was present for every minute, alone at a head table as if in a classroom setting, the rest of us at long tables at right angles to his. Very little space to spare, which leant to the intimacy. Ed Meese, RR's chief of staff in the Sacramento days, played MC. Campaign Manager John Sears was present throughout. His deputy, Charlie Black, was present for brief intervals. Jim Lake, press secretary, attended most of the sessions. Agnes Waldron, Gary Jones, Bruce Barr, Kevin Hopkins, Doug Bandow -- policy staffers -- for the most part simply audited the sessions. Martin Anderson, Richard Whalen, Richard V. Allen, William Van Cleve, William Schneider -- outside experts (the first two domestic, the others foreign policy) were heavy participants in one or more sessions. Rep. Jack Kemp attended all the sessions, as "Director of Policy Development", and his "team" included me and Art Laffer, who attended the Friday session, and two members of his personal staff.
Reagan, physically: He will be 69 in a few weeks, but seems roughly 63-65 in physical appearance, except for that great black mane, which has only a sprinkling of gray. He must exercise as much as he is reported to, because he is taut, yet loves to eat, and seemed most boyish when he learned the Deli had not delivered dessert with the sandwiches on Friday. "Who's on a diet around here?" There were no breaks except for the 1-hour sandwiches for lunch, eaten on the spot, and it was rather remarkable to me that RR never "glazed over." He did stifle yawns now and then, but considering the density of the material under discussion -- and the time, he went from 1 p.m. to 6 p.m. on Friday without ever leaving his seat -- it was surprising how alert he remained. At the end of the day, with everyone else looking frazzled, RR and Kemp still seemed ready to go for another few hours.
Reagan, mentally: He has an astonishing memory, especially for anecdotes appropriate to illuminate political points. The best way to tell that he is in fact not playing at paying attention, or understanding some complex idea that is being expressed, is that at its conclusion he relates a story out of his governorship or acting career that roughly embraces the idea. He related one story, to illustrate the absence of incentives in the ghetto, and couldn't remember where he heard it; Kemp later told me he had used the anecdote in a speech six months ago, and Reagan was on the platform and absorbed it. The one sign of age in his mental complexion is that he does not realize he cannot tell stories out of the mid-1940s without identifying the cast of characters; several people in the room had not even been born at the time of one story involving the Screen Actors Guild. On the other hand, at the conclusion of this particular story, Ed Meese intervened to diplomatically chastise RR for having dredged it up, and RR not only accepted the criticism graciously, he was careful in the following day and a half to avoid the error. I was most encouraged to see the subtlety of his mind in moving between the abstract and the particular, but this could only be observed over a stretch of hours. In other words, I was alarmed in the first two hours of discussion to think there was so little subtlety in his thinking, but after 15 hours I realized what was going on: He was throwing off two-dimensional observations to invite debate, i.e., we shouldn't sell wheat to the Russians. But later, there would be another two-dimensional observation, going to the short term: wheat farmers had already planted their winter wheat and would be hurt by an embargo. Later still, going to the longer term, once embargoed, the market would tend to be lost to Canadians, Australians, Argentina. Thus, Reagan would, when forced to decide a real, rather than hypothetical problem, pull out a series of two-dimensional variables (index cards, if you will) and do the sophisticated mental gymnastics to come to an optimum, three-dimensional solution. Thus, where I worried he might make decisions via a simple, automatic process (right wing, left wing), I was delighted to find enough shadings of black and white to indicate considerable depth.
Reagan, personally: I met Reagan in May, 1976, and spent almost three hours with him at his home in Pacific Palisades. I came away then thinking he was the "nicest" politician I'd ever encountered at the national level, and ever since I wondered if that day was anomalous, or if he wasn't just a terrific actor and programmed himself to be "nice" for an editor of The Wall Street Journal. Yet it was more than friendliness, which almost any politico can feign for several hours. He didn't seem to have the usual ego on the sleeve, which suggested to me then that he would probably have been as smiling and friendly if I had just knocked on his door to ask directions on how to get to Malibu. Even if I had awakened him from a nap. That's the kind of nice I mean.
He was no different this trip. During the entire exercise he never departed from an attitude of relaxed good humor. Never a trace of peevishness. Not a single ad hominem remark. Nothing Nixonian at all. There were, during the sessions, hostile remarks that others directed at the "press corps," but RR would not feed such commentary and they would wither and die out. He accepts criticism without any defenses, as if you were giving him a gift, and as a result there seems no hesitancy on the part of his regulars to correct him -- as when Meese did so over the S.A.G. story -- and an easiness quickly communicated to non-regulars, like Kemp and me, that we don't have to beat around the bush if we think RR is all wet. On the first day, I was shocked when a hypothetical question was put to RR about whether or not he would sell arms to Communist China, and after talking around the edges of the question for a minute, said simply: I don't know enough to answer that question. He invited discussion and debate with this admission, and it followed. This air of bonhomie from Reagan spreads like a blanket over the whole group, and civility is sustained throughout all the clashes of ideas. Even the "age" issue carries no sensitivity, and he and the group discussed it whenever appropriate, if Reagan was trying to pretend that he isn't almost 69. (Late Friday RR recounted a story relating to the passage of the progressive income tax amendment in 1913, adding parenthetically it was one story he wasn't recounting from memory -- a crack that got a big laugh.) I may add that two of Kemp's personal staff, who had never met RR at all and who came with apprehensions, told me the same thing, that they were pleasantly surprised at how open and nice a fellow he is.
Reagan Substantively: I made two formal presentations during the meetings, one on the historical perspective of supply-side (classical) economic ideas, the second on energy. Laffer made a formal presentation on global money and inflation. The criticisms were along the lines that the ideas are theoretically correct, but no longer practical in the modern world. Reagan resisted such criticisms at every turn, and instead seemed to firmly reject counter-proposals of a "practical" nature. He has the concept of economic growth, as opposed to the Malthusian idea, in his bones and thus finds himself extremely comfortable with supply-side ideas. He seems not at all distressed that John Connally is the candidate of "big business," and at one point said he would be the candidate of the entrepreneur, the farmer, the small businessman, the independent. He has heard Kemp speak so many times by now, and has read so much of the supply-side material, that he was fairly sharp in handling the ideas during the briefing, and it only remains to be seen how much of the polishing sticks to him now that the briefings have concluded. He does still tend to look at domestic and foreign policy -- on both energy and economic policy -- in separate compartments. Kemp and I both pushed to get him to see that foreign policy must have more of an economic component. At the very least, he understands this aspect more than any of the other contenders of either party, but it again remains to be seen how much further he can move in the campaign toward seeing the world as a closed political economy.
Conclusion: If RR's campaign unfolds in a way that reflects his own instincts, the results would be broadly encouraging for the economy in 1980, not to say 1981 and beyond. For one thing, he should wrap up the GOP nomination rather quickly and early. When he was more or less out of sight and laying low, we tended to forget that he is a formidable politician, and instead reflected on his age. If I had not spent these three days and many hours with him, I would have agreed with those who observed that he was the "big loser" in failing to show for the January 5 Iowa GOP debate. But RR'S personal performance in the L.A. briefings was so superior to any of the Iowa performances that I cannot believe he will have any difficulty in the primaries.
Reagan, of course, is still in the position of having strategy managed by John Sears, his campaign manager, and one wonders how daring the candidate will be in following his instincts. How audacious will he be in creating a grand strategy with supply-side ideas at the core, for the U.S. and the world community? How bold will he be in articulating the rest of the agenda, a reconstituted international monetary system, dollar convertibility, etc. Everything seemed possible during this California exercise in ideas, but the political calculus will still have to determine what is practical. The bottom line, though, is clearly that I feel better about a Reagan presidency after the trip than I did before the trip, and even then I felt pretty good.