In Memoriam Donald Regan
Don Regan`s strength and loyalty, Ronald Reagan
would have been a less successful president.
After Don Regan was nominated as Treasury
Secretary by President-elect Reagan, he asked me to stop
by to see him. He would need a strong supply-side team,
he said, if he was to succeed in his task of getting
Reagan`s controversial new economic policy out of the
administration and through the Congress.
Regan was concerned that he might not get
the team he wanted, because he had read press reports
that some supply-siders had preferred a different
candidate and were unhappy with his nomination. He was
also concerned about the low pay of sub-Cabinet jobs. In
his matter-of-fact way, he laid it on the line:
Supply-siders had sold the president on a new policy,
and it was their responsibility to come help him
deliver the goods.
Regan realized that we were in for an uphill
fight. Supply-side economics was not widely understood,
least of all by the Republicans. Moreover, the
Republican establishment had no stake in a policy
identified with outsiders like Jack Kemp and Ronald
Reagan. George Bush had called it "voodoo economics,"
and this was the opinion of important Republican
The economics profession was against it.
Keynesian economists did not believe that the economy
could grow without causing higher inflation. They were
convinced that a budget deficit from tax cuts and
military spending would cause the existing double-digit
inflation rate to explode. Fed Chairman Paul Volcker had
the same opinion.
Don Regan had no illusions: "It`s the President
and the Treasury against the world."
Regan could have taken the easy path. He
could have tried to talk Reagan out of going forward
with a controversial new policy. He could have assembled
a team lacking the determination to succeed with the
Instead, Regan set out to achieve what the
The 1981 tax cut was a near-run thing. It
almost did not get out of the administration. After it
became law, those who continued to oppose the tax cut
worked to have it repealed in Reagan`s 1982 State of the
They failed, but the experience left Don
Regan frustrated with President Reagan`s lax management
style. OMB director David Stockman and White House Chief
of Staff James Baker had tried to box in Reagan and
force him to accept major tax increases. They told Regan
that Reagan`s intransigence on taxes was merely an act
designed to get maximum leverage on spending cuts. They
told Regan that Treasury`s opposition to tax increases
would leave him out on a limb.
In his 1982 State of the Union address,
Reagan chastised the advisers who had tried to
substitute their policy for his. The press understood
that Reagan was chastising Stockman and Baker. The
morning after the State of the Union Address, press
secretary Larry Speakes met with the White House
correspondents. The first question was, "Is Jim Baker
still employed today?"
Don Regan believed that when the president
made a decision, it was the duty of subordinates to get
on board with the decision or to resign. He did not
understand how Reagan could tolerate his aides` perfidy.
Regan decided that if Reagan`s second term was to
be successful, he would have to become chief of staff.
Since Reagan wouldn`t fire Baker, Regan swapped jobs
Regan had an unusual loyalty. He did not
know Reagan prior to becoming Treasury Secretary. Yet
his loyalty to Reagan was second only to Nancy`s.
Regan did not play the Washington game. He
told me early on that he had ceased going to Washington
dinner parties where "everyone tries to tell me how
to run the Treasury." This left him without a
support system when the sharks decided to use
Iran-Contra to weaken Reagan by forcing out his strong
loyal arm in 1987.
The Republican establishment gained control and
installed former Sen. Howard Baker as chief of staff.
Regan had achieved a high level of success
in his life. He brought the confidence that success had
given him to Washington. He knew who he was and had no
problem with helping another man achieve even greater
success. Regan supported Reagan`s economic policy, which
brought the end of stagflation, and he encouraged the
relationship with Mikhail Gorbachev, which brought the
Paul Craig Roberts, author of
The Supply-Side Revolution,
was assistant Secretary of the Treasury for Economic
Policy during President Reagan`s first term.