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ROBB AUSTIN'S TURN

Reagan and Me in the Roosevelt Room

October 15, 2014

The first time I met President Ronald Reagan was in August of 1981.

It was in the Roosevelt Room in the West Wing of the White House one evening after work. The President was talking to a group of high rollers (major Republican donors) from the state of Connecticut.

My friend and mentor, Assistant to the President, and former Chairman of the National Republican Committee, the late Lee Atwater, asked me to sit in on the meeting.

The Roosevelt Room is impressive. Located just a few feet from the Oval Office, it is the best known meeting room in the West Wing, and was once the office of former President Theodore Roosevelt. His “Rough Rider” portrait hangs above the fireplace mantel in the room.

On this warm, summer evening, President Reagan asked this group of influential Republicans to continue their support for his economic recovery program, most notably his across the board reduction in federal income tax rates for all taxpayers, that had just passed Congress.

He was confident an economic recovery was just around the corner. The President often used the backdrop of his Hollywood experience when explaining the genesis of his political or economic policy.

On this evening, he told the group a story about the filming of one scene in the 1940 biographical film, Knute Rockne, All American, a story about the famous Notre Dame football coach.

“There was a scene with only a farmer and a horse but the shot on location created work for seventy people,” the President explained, adding that in his mind, this same principle affected his thinking when it came to his proposed tax policy.

President Reagan wanted people to be able to spend more of what they earned because it would lead to more employment and prosperity.  Some called his theory “supply-side economics”, whereas Reagan liked to say, it was “common sense”.

Fast forward to the present. The primary reason the economy cannot get a footing is because expendable income, that is, money people have left over to spend after paying the "necessities" is on the decline under President Obama.

People are uneasy spending freely. They are worried about holding on to their current job and aren't sure there will another one waiting for them, should they lose the one they have.

Younger people cannot find any work or are severely underemployed, meaning they are in jobs beneath their skills and education. The Baby Boom generation is dropping out of the work force all together as thousands opt to take social security everyday. The reality of a prosperous retirement for them is starting to slip away.

As today's economy flounders and people's income remain stagnate, my
thoughts go back to President Reagan in the Roosevelt Room and his recollection of a scene in the 1940 movie Knute Rockne, All American. It was his simple (but correct) philosophy that people did best when government not only got out of the way, but provided incentives for creative minds to follow dreams and hire people.

This is how Reagan saw the movie industry, and this one scene, with a farmer and a horse, led to his plan of tax cuts for everyone that eventually rocketed the economy and set the stage for unheard of prosperity throughout the 80s and 90s.

With it, the creation of millions of jobs, an amazing surge in real income, and most of the technological advances we take for granted today.