This past Sunday was the 100th anniversary of the birth of our 40th president, Ronald Reagan. Many people believe Reagan was the greatest president of the 20th century, and he continually ranks at the top of every poll. However, some would claim that Reagan’s policies left many American cities behind.
In fact, nothing could be further from the truth. And no city benefitted more from Reagan than New York City. A quick look at the Reagan record will show just how much NYC gained under his leadership.
The first Reagan priority was to tame inflation. Working with Federal Reserve Chairman Paul Volcker, they brought inflation down from 13.5 percent in 1980 to a mere 3 percent by 1983. Because of the naturally high cost of living in cosmopolitan areas, the impact this had on cities, especially in poorer neighborhoods, was dramatic. Next Reagan cut marginal tax rates 25 percent for every American worker.
This, along with the elimination of inflation, meant more real dollars in the pocket of American workers. That also meant more purchasing power, followed by an explosion among small businesses and rapid growth of the middle class. Nowhere was middle class growth stronger than in urban areas, historically plagued by high unemployment in Black communities. In 1980, unemployment in NYC was 8.9 percent. By the time Reagan left office, it was down to 5.1 percent. That is almost a 40 percent decrease and a low not seen again until 2006.
Another Reagan priority was tax simplification. Reagan took 14 tax brackets and squeezed them into just two, 15 and 28 percent. Then he eliminated tax loopholes, also referred to back then as tax shelters. This was where the government gave preferential tax treatment to “favored” activities, like real estate, that did nothing to help with real economic development or innovation. After Reagan’s reforms, money was invested where profit potential was strongest, leading to a boom in technology, medical, and pharmaceutical industries, among others.
Wall Street was likely the biggest beneficiary of this, including the tens of thousands of jobs created to help service the Wall Street sector. This also led to the substantial growth of Silicon Valley in California and Silicon Alley here in Manhattan.
So, while in large part we have Reagan to thank next time we use our Blackberry, iPod or the internet, we have him to thank for so much more. The effect Reagan had on NYC was felt on Wall Street, Madison Avenue, and even on Martin Luther King, Jr. Boulevard.
His ultimate legacy was greater prosperity for everyone and a better – and maybe more fun – quality of life.