faith on the capitol steps. and they ayed but he was not a guide to take chances of he did not schedule the prayer vigil d tell whether pro -- weather forecasters predicted it would rain. [laughter] ..

gude julie new well so long as you did not pump more than 0,000 gallons of water per day per day. after that you need a permit t the standards of the permits are pretty elusive. this is a state that gets a lot of rain but has a major problem in the major problem isrowth. here is the final thing that i think you will get a kick out of. how many people know about stone mountain, the theme park outside of atlanta the? in the middle of the drought they brought these new, this new

feature on line, coca-colas no, mountain. they decided that research disclosethat the very few atlanta children had ever had a satisfactory snow experience. you wonder how long did it take to do their research for this? so ty build an outdoor snowmang project with a huge tubing hill and play area brought on september 27th in the midst of the worst drought in memory on a day when the temperature was 81 degrees. we humans have an infite capacity to deny reality. the reality i that this drop was not particularly different from other dgs. th is what the scientists have observed. the same thing might be said by the way for cifornia and the drought they are now going through. what has changed is population

growth. metro atlanta a about 100,000 people a yr. the state of california since the last drought ended in 92 has added 9 billion people. that is the real problem. but we ignore it. we have a drought and we bece aware, we get concerned, we panic, it rains and we are apathec. the relentless hydro illogic cycle and that is exactly what ppened in georgia. that momenthere were a f rainstor the government said you havgot a new ethic of water conversation and you canal filled the smming ols and water your lawns. so what is the problem? the problems the supply and demand problem. it you think of our water supply as a giant milkske class and you think of each demand as

distraught in the class what most states permit as georgia does is a limless number of straws in the same glass which o course is a recipe for disaster particularly when you have so many demands for new water. population growth is of course the elepht in t room. a year ago we nedge over 300 million in the united states but the census bureau predicts that by mid centu number 420 million people. in the next 41 years we are going to add 120 million more fellow citizens. then you have some fairly is this one, a power shower. power showers are very popula in phoenix it is one of the reasons we into sun looked down on people in phoenix. this particular one has ten showerheads all capable of

taking the paint off walls but none of them are capable of getting the model ploss wet. then there is bottled water. i was t first to point the finger at bottled water in my book water folly. the issue of bottled water sometimes bottle versus tap and it is so much more expensive, but realistically many people who are drinking bottled would not choose tapped, they would have chosen coke, psi or gatorade or another bottled beverage so you need to compare those prices and equally on t pollution interest of the bottles and plastic involve you need to compare the plastic in the bottled water versus the plastic and aluminum and others. still the backlash is unmistakable. cebrity chefs around the country have come out and said no more.

some churches he made it a religious crusade. there is a wonderful spooff bottles of water by penn and teller. youay have seen it on their showtime cable shnw. they have a fancy california restaurant and instead of a wine eward they have a waters to word and instead of a wine list th have a wer list and a fellow is telling the patro about the arctic slavers and things like thisut meanwhile pen is in the back with a garden hoses filling of the bottles. [laughter] this is another demand that we have jot paid any attention to and i want to be really serious about this. there is a profound disconnect in u.s. energyicy. there is nottention paid to the water demands of various forms of energy consumption and i use as a poster child ethanol. ethanol is controversial for a

lot of reasons but the point i want to make here is the water aspects of the ethanol, even in a modern plant that recycles water it still takes 4 galns of water to refine 1 gallonf ethanol. the country has a goalf producin36 billion glons of ethanol by 2022 so 36 four giv you a real big chunk of water but first you have to grow the corn for the refining process and it may takes much as 2500 gallons of water to grow in of corn to refine enough to refine 1 gallon of ethano. 2500 gallons of water for enough corn for 1 gallon of ethanol. that is okay if you are in illinois where rainfall is the way you irrigate but wants to move west of the 100 meridian

all of these states out here, we irrigate. consider the implications for california. californ wants to produce a biion gallons of ethanol in the next ten years. that wou require diverting every drop of water that goes through the bay delta that those at the central valley farmers, 7 million the most productive acres in the united stateand goes to supply southern californiaoastal cities and would have to be diverted into cgrn production for at the mall. we need to pay attention to the water demands of various forms of energy production. conversely, it takes a lot of energy for water production. 19% of all the energy used in california i to pump, treat hand deliver water. one fifth of all of the energy is about waters of there is an incredible connecion between water and energy.

here is another example of that, another demand we would not think about, google. when i think go-go i think the algorithm, i think the mountai view campus with bearded sandaled deacs riding code but this is what google i about. it is industrial manufacturing cility and what it h in these windows was concrete structures are tenof thousands of computers all linked up so that when you press that search button this is what gets started. the server farm. you think of that many computers think about the hea that is being generatedy those computers. think 10,000 toaster ovens and you get the idea. so google use this water to air-conditioned the computers because otherwi they woul just absolutely crash and not literally burned but figuratively burn. so my point heris one more

example of a big demand for water. obviously hi dalia, obviously a company we want to make sure has plenty of water a yet it is then on known to man. e internet already uses 1.5% of all electricity in the united states and that is expected to double witn the next 18 months. so what are ve going to do about it? there are some real solutions and there also some real solutions. the usual thing we do in the united states when faced with a water shortage is to think we can engineer our way out of it. there must be some way to bring in new supplies to solve the problem. there no need for us to live within our means, no need for us to recognize that the supply of water is finite and there must be wayto augment it. usually that means more diversions from rivers come up more dams, more wealth.

manyivers are already dry from the diversions, the colorado and the rio grande the are examples. th government has not even countedhe number. lots abreu versus gramlich countries and streams suffe from low fro-max lows. dams, we areood at building dams. only 60 rivers in the united states our unjammed. all thethers are dam than most of them repeatedly. there are few good dams sites let them even on rivers that our dams dams are not filling up. so the environmental community for example in california asked pointedly why build a new dam if the existing dam doesn't fill up with water behind it. that doesn't seem to ma too much sense. the third of the traditional options groundwater pumping but this photoh illustrates the poster child of excess of

groundwater pumping and that is the ogallala aquifer that stretches om the panhandle of texas and covers seven states but the red and yellow colors indicate declines of 50, 100 ev 200 feet of the water table. that is occurring all of around the united stas. surely we in arizonan know that very well. here is a photograph from nearby queen creek aarsohn of from 2005 that starts to show some of the consequences of excess of groundwater pulping and joaquin valley in california and you can see at the top of the photograph that is where they land sface was in the year 1925. this is where the land surface was by the year 1977 all fm excessive groundwater pumping. so where doe water in the river come from if it hasn't rained

recently? because what you have is the river as the low point in the basin and there is water moving laterally to provide flows to reverse the wind you have this much groundwater pumping you are going to have devastating coequences on the surface lows. th is an example in florida of a sink hole created by excessive groundwater pumping. scores of lakes, lakes in florida have dried up from groundwater pumping. this is not simply a western problem. this is a national problem. in my home state of massachusetts the ipswich river just north and west of boston has gonery in five of the last eight years from groundwater pumping so my message here is very simple. busiss as usual willot cut it. we are not going to solve our waterhortage problems by more diversions, more dams or more

lls but what else are weoi to do? some kramer still think we are going to import water from someplace else. occasionally proposals surface for towing and icebergs from the arctic to diverting a river from british coloma or in this case a fellow in colorado wants to embark on a 4 billion-dollar project tmove water from flaming gorge reservoir on the border of wying and utah over to colorado springs sometimes dreamersolikoff buthis guy is facing a number of very major stacles. one of them is lled the rocky mountains. everybody complains about the weather but nobody ever does anything about it said mar twain. what about cloud feedi. that is putting silver iodine in clouds to make it rain. some people believe in this.

there is a religious fervor and for people who advocate this. scientific communities are far more skeptical or agnostic about it. the problem is a cause and effect one they put silver iodine in the clouds and itains or mae it would efrain any way or how do you know it will reign more tn it would have drained because you said the clouds of the natial research council has ncluded in their report in 20 that dpite six decades of experiments of cloud feeding there is "no convincing scientific proof gn "that it works but still we like to dream the iossible dreams and imagine that there is an engineering solution. how about the cell? the sells stars to get this down the road of a viable alternative.

as you have hearalready from another speaker there are a few challenges. principally it faces three problems. one it is incredibly expensive part of the membranes for reverse osmosis are very high-tech, very expensive, very delicate in crown to falling. second uses gad davinci and energy is of course expense of an energ takes more water and there you have the challenge the what do you do with the ryan stream that is left over after eun di selate the possible supplies a.u. use the high pressure to push the water against the mbrane and all the saltz remain t only now they are farore ccentrated and u need to figure out somhing to do with that. still if you have a important project in the municipal area where money is not a concern these lonization will be part

of the portfolio for solving org least addressing the puic supply. what about. we are ung reclaimed water in arizona about 10% of what the city of tucson delivers and it will go up inhe future. the technology is there. there is the yupp factor. when the san diego tribune reporter in a smart aleck way with, the mayor could not back away dast enough from signing on to that but the truth is we don' need to use reclaimed water for illaudable purposes, we can find lots of uses, turf irrigation, industrial applications and theike an best of all that's applied for those in the population grows the more water that goes tthe wastewater treatment the more

you have four pottial rse. how about conservation? conservation would be a very good idea of. some areas of the country though the culture really hasn't yet got natanz around conservation. california is a good example. this is a fairly unfortunate comment by the senator but she is thought alone. sacramento find a couple $748 in the midst of the drought because they weren't watering their lawns enough and it was in violation of city code. the mayor o san diego a few months ago proudlyroclaimd that his city was embarking on a new history of water usage. why was the mor s proud? because new regulations would prohibit san diego residents from watering their lawns more than three times a week. san diego gets 12 incs of rain a year. that is just a little bit more

than we get into some. they only act as though they are in the trocs. they are actually in the desert. southern california imports more water than anyplace on earth. they look good some of these uses in california and go a long way toward solving their water crisis. mealwhile they are all kinds of interesting things being done ound the country with respect to conservatn, tuscon has been active in that and there's a very aggressive program. albuquerque hasone well and there are individuals who were acting. water harvesting is becoming a really interesting way to save water. this photographs is from an island in san juan off of seattle. they put in a so and take the lead rainwater that comes off of the ro and stored in the silo r use you around. in oakland california there's a group of women who call

themselves the gray water guerillas for now using what is called gray wate water brom washing machines for landscaping purposes so conservation clearly is part of the way we must proceed. know i would like to turn what i think is a set of new approaches dealing with ter in the united states. want to have you reexamine the role of flush toilets in the american society. teddy roosevelt teddy this century ago this civilized people should be able to dispose of sewage and it better with them by putting it in the drinking wat. that is right and tt is what we do. we take sewage imploded in inking water and we do it again and ain and again so the water goes to the treatment plant and gets treated for photable purposes where we only

used 10% for drinking and cooking. the rest of ite use for non-possible purposes incding one-third gf allater used indoors goes down the toilet. that is 7 billion gallons of water a day come of billions of gallons of water a day to get rid of human waste. wean do better. it is a system that wastewater, waste energy, wastes money, more than 50 billion gallons a year and threatens public health. because the traditional treatment plants do not remove ter called emging contamants bypa. appeaser and a krin destructing compounds, ahemical pharmaceuticals at we in just everything from hormone supplements to birth control pills to antibtics to dysfunction medicine. weeks crete the rest of it and it goes into the water supply

there are flesh goes to the wastewater treatment plant in those plans do not remove these emicals. we don't know the human health consequences of ingesting incredibly tiny doses measure in the parts per trillion egg a veritae cocktail of multiple chemicals. let's the scientist to know tt the fish and frogs downstream are proundly affected by it because they a finding intersect fish with the of the other's gender and finding the form of frogs. we need now in the united stes to embk on a program for an alternative way of dealing with human waste. the time is right. our infrastructure is in a terrible state of disrepair. we need a national commissio that will address waterle ways of dealing with human waste. the conservation and human health and the money in the water savings all demand it.

this is a tough sell. i understand that. the ann coulter things they flesh paris mankind's sgle greatest invention and she describes people who want to do away with the and a very nasty epithet. they are liberals. [laughter] they are people who abdicate living in their own excrement. tough, tough words. freud wouldave a field day. the second approach. i want you to focus on the price of water but i want to raise your wat bill. we are spoiled. we pay less for water than we do for cell phone servers are cable television. the fact i we don't pay for water at all. when you write a check to the municipal water dartment or the public corporation reguled

by the state public utility commission the only thing you are writing the check for is the cost of service. it is the cost ofhe utility. there's no commodity charge for water. in some cities in the united statn fact there's no charge even for the cost of this service. in fresno california you can use all the water you want. does it make a difference? you bet it makes a difference. per capita use in fresno 300 gallons pecapita per day. they he meters, 200 gallons per capped per day going one-thirdf american cities the rate structure is a declining blker rate structure so every additionalnit of war you use you pay less for. this is a bad system. what we need to do is to start with the basic assumption that water the human right.

if we in the united states, the richest cry in the history of the world cannot makehat commitment to our people then we r.a. sorry light. the truth is that is not that much water. it is about 12 or 15 gallons per person per day. multiplied by 300 million, that is 1% of water usage in the united states so let's take that off the table. now let's talk about he are ing torice appropriate the other 99% of the water and we need increasing block grayson we should make them seasonay adjusted in order to encourage conservation. and the third of mine new ideas, new proaches is to recognize the reality supply is final. if someone wants to put a news drought in the class we shod insist that they offsets that on

the public supplied by pinching or removing someone else's straw. we need to require developers pay their own way. we need to require developers to purchase and retire existing water and i have an example o that. how many people know about geneva steel? a couple. a company built by the u.s. government in the second world war, by the end of thisentury the steel industry was on the roads. people seem to want to buy said they going to bankruptcy and they tried to reorganize and the chance of the move to liquidate their asss of a sell-off their assets. fortunately they had substantial assets. first they have the land. this is a plant loced just outside of prudhoe where brigham young university is and they had 1700 plus acres ofand that brought in $46 million.

the next thing ithe plt itself. they dismantled all the whistles and bells iron ore mine that they sold a mining concern for ten and then perhaps somewhat ironically they had a collusion production credit. they we no longerdmitting because they were bank of so they sold thoseredit for 4 million so alltell that brings in $100 million. then they turned around and sold it water rights for02 million. the water rights were worth more than all of these other substantial assets combined. this is the future of water in the united states and what happened in utah was state engineers said i am no longer going tolay the game of

charades. i am no longer goi to pretend there is for water and outhere we can run from our rivers or you can simply put new wilson and it won't be affect the neighbors or rivers. if you are going to do a deal, you are goingo bring water to the table. e purchaser of this washe utah equivalent of our central arizona pject, it water wholeser that was doinghe bidding of utah valley, that were doing the bidding of developers so ultimately the $100 million will be paid exactly as it should be by the delopers. it doesn't matter what kind of developers wheth it is a housing developer or ggle server farm or any other use you need to bring water to the table. in the way the steel case is an erage case because they are not many steel companies selling their water rights. the water that will be freed up will come from farmers because

farmers u 80% of all the water in thenited states. and sof we are talking about reallocating water as we are and what we a talking about this farmers giving up some of it in the question is what will this do to the farming community? i just finished a national science foundation project with to econosts and the study transfers in the american westover 25 years. there are about 3200 transfers involving the annual flow of the colorado river. a lot of water and even though most of this water gent out of agriculture farming inflation did not go down. how can tt be? that can be because farmers are stat business people and when faced with an opportunity of making some money ey use that money reform the irrigation stem come to move sprinklers and ortie that was clay soil and

pfaelzer a pure anyay out of productionn one of the other things it does is it changes t crop bedsitter this is your classic steel production in the american west. is is the iceberg let us in e beuhler area ald it takes a score of workers backbreaking literally backbreaking bent over wo in the better part of the day to harvest the fie. what some fmers in yuma valley haveone is to move to baby let us. you were payingor it and you were buying them in bags or plastic boxes. they are triplwash and they are incredibly convenient and there seems to be a consumer preference for tse sorts of lettuces as opposeto the iceberg. i still think eyes burd with some ranch dressing-- well, nevermind. in any event these are popular

this is how you cultivate the iceberlet us. this is basically a giant electric razor going across the ps of the lettuce andutting them off. the conveyor belt takes the lead as to the top. they fall into boxes a the workmen in the back move the boxes to the neighboring truxton when you finish the truck goes off to market and they send a tractor back down with feilizer. no need for pesticides because they are so close together there are no weeds and within a certain number of days he can do the wle thing over ain. it takes four guys in morning to harvest the entire field and there was the value added to the farmers nothing short of remarkable. thr two quick fin comments. what about the entire-- environment the community. this is aboua river in eastern

oregon, john bay and a group called the oregon water trust approach the farmers. the farmers and rancherand nching in the area for three generations. it was not a very profitable ranching operation buthey d a chance thanks to the oregon watercress to modernize the irrigation system and the ranchers said we will pay you $700,000 if yo turn your sprinklers off o july 20th of their preseason. after that the 6.5 million gallons per day tha we would otherwise use will stay in the river for fish and recreation purposes. the farmers said done. it is a win-win. the farmers got money to overhaul their system. they are still ery much in business and the environmental community received the water as well. in the end it is what we visited

them buffalo. we havdone that in so many other species and we are doing it to water. we need to recognize the finite capacity of the supply and figure out new ways to deal with that. there is a long list of things that i can discuss with you this rning an i'm not going to read through those. instead i just want to focus on the optimistic part and that is it is urgent that we a because it is a crisis by the crisis is a time for opportunity and it is a time when we can keep the crisis from becoming a catastrophe. there is room for all levels of government, local state and federal. >> involve and also for us indiduals. even simple things can make a big difference. let me add a very tiny example. your food disposal in your kitchen sink. even within aerator, if you run that two minutes a dayou use

150 gallons of water per month. for getting rid of food scraps he could just as easily throw in theaist or put in your compost chipper coat it is a small step of one that would be very effective. so can we address the crisi you bet we can address the crisis. now what it takes is the moral courage in the political will to act. thafks. [applause] >> i told you he would be interesting. we have time for questions if you have questions please stand up so you can be on c-span. [inaudible]

deal feel that the county has the requirements to regulate land-- [inaudible] [inaudible] >> a good question and one that their lawyers basically the

preemption issue. we talked a lot about that in king county at the timand we think both under what is in basic provisions of specific grants of the county to act in the owing legislation and the way the county systemorks is interesting. and it is not duplicating what the state department of water resources do. it is not saying to you have an insured water supply. what it isaying of the time the developer ces in for rezoning the board of supervisors asked lots of questions out lots of important issues. th ask questions about roads. they want to know about sools. they want to know about parks and what this does is say and they wan to know about water. it is just one more in the mix of things that will go into the lculus that any b would use to make an ielligent decision about whether rezong makes sense. beyond there is some of the utah

exple is a good one of how they are doing exactly that. y be aetter example for your concerns about local government would be the city of santa fe new mexico. the what they did is they said okay if you are goingo put a new house of we want you to offset that water use by replacing existing fixtures in existing homes and they calculated that if yobuild a home, of average size, if you replace 8-flow toilets with eight low flow toileou would offset the water that the new house would require. pretty quickly there was a veritable industry of plumbing and santa fe going around door to door saying to you want a new toilet and people said sure i will take t new toilet. well, there were no gold toilets lectin santa fe it was so successful but the city stayed

the cour and said we are on to something. thisffsets, this demand offset thing makes all the sense in the world. admittedly it is radical. in the west have got along r generations without paying the slightest attenti to whether connection between new growth andater. we just ignored it but places like utah and san f.a. arnell going down that path than we have to do that, we just have to. >> if i could follow up on robert's question if we assume the county has the right under its managing the property and so ng to consider water come and give that consideration then denies someone under existing arizona water las from beneficiary usefater on their property we seem to find ourselves in somewhat of a legal dilemma, do we not? >> only if you think there is

some absolute right to use water in a violation of the takings clause but the case law is not shaking out that way at all. it is an argument being used an argument that in almost ever instance has been rejected. there are a couple of court of appeals we the court has found for the aima but for the most part if you remember the basic principle that we heard from iran this morning which is water is a publhc resource owned by the state and you get a use right to it and in arizona the court, the supreme court has made plain there can be conditions on that so i think it's certainly an issue. we will have to see how it plays out but i think it is- it just tests to be right? we can't continue with the madnes that geges still has and arizona has outside othe

areas of anyone andhat is the circular firing squad. surely there is no legal right to have this be the future rough water use. >> y may preference-- i know you made reference to the political will to move forward on some of your proposals and he made reference to h mh we have not played in their groundwater strategy elites with them our active management strategynd we have been planning so much in advance. how do you see a political will taking us to the next up when we are fnkly in the phoenix area and e tucson area of not faci it water supply cris today? >> that is a great question. if we don't think there's a crisis then we won't have the political will for it. and i would like to think that the exales i gave at the

beginning show natioide there is a crisis. it is not every place in the united states. the state of michigan still has plenty owater that people are moving away from the state of michigan. watusi is the demographic shifts within the big population increase, the demographic shifts are people are we moving from where the water is to where the water isn't so there isn't enough. what i like about these proposals about the price signals and market forces is this is something we haven't been trying. anyone whos dealt with the short water supply rose know how detailed and cicated they e. 36 pages of single spaced small princend you have to ask what is really been accomplished by these rus and regulations so what i'm sugsting is the rather than tryingo hammer people over the head with more governmdnt rules and regulations why not give them clear price signals with increasing rates so that they can make some

adjustments and encourage consevation and we have to reallocate because i think you willll agree we can't keep putting new raws in the glass. one more question and then we have to go to lunch. >> i read a quote from you in the arizona republic and i would like to get your views about the groundwater replenishment district and what you think needs to be done if anything with regard to that process that we have? >> well the ground water replenishment district is a complicated piece of legislation. it was designed initially to take into account the concerns of developers who were not within active managemt areas d who were still-- i am sorry not within service areas where

they could readily get water but they were within active areas so they needed to show a supy of water and these satellite communities, theevelopers said look we are spending a lot o time trying to secure water rights. all about use state agencies to secure those water rights and making go back to the business of building homes and that sounded inocent enough but the way that it is work id has transferred effectively to the district obligation to come up with new supplies. the district has been in place foranner 12 years. there is a plan of operation that has been supplemented and updated, but the actual acquisition of water rights and is way behindhe commied amounts of water that is needed for the supply. i know this sounds complated but i want to go back to the original prese of the ground water management t was to stop

this madness and it was to save you are going to put a straw and whose water is this? were you getting this water from and what will the supply bee and unfortunately this wave that the ground water management district works is that has taken that the onus off the developer and put it on this district. eventual there will be surcharges on property and hapless landowners are goingo find out somewhere down the road that they are going to pa aot for water that they did not anticipate and the meantime yo set up this intense competition between the district on the one hand and communities like scott steel or tuscon on the other hand they are looking for new supplies and it now turns out there looking for produs of new supplies. everyone once-- so it is a complicated situation and i think it is, i interested how can about but i think it is

unfortunate that we didn't keep the developers, keep-- i thi i need andhe now so you can get to lunch. thks very much. >> thanks very much. [applause] >> arizonian diverse city law professor robert glennons also the author of "water follies," groundwater pumping and the fate of america's fresh waters. for more information visit laude dodge arizonan dotsy edu you. >> as i said before they were marketers. they lived in l.a.. they had left a.com start up after it collapsed in 2010 started their own e-mail marketing company. e time e-mail marketing was not officially known as spam but

it was because they weren't getting consent from the people they were sending the e-mails to and then it quickly, they were profitable. there was the way to raise money at that time. the venture capitalists had fled and they branson to selling in addition to sending e-mails for other people they started selling their own products. the sold e-books with titles like how to hypnotize people and how to grow taller ich ilvolved a lot of stretching. and they also distributed spyware right after 9/11. they distributed some software that would tn your cursor on your computer into a littl american flag with spy with a tract u.s.c. went around the internet and would give you targeted ads, so they were operatg what they call the fringes of the internet economy. >> this was a portion of the booktv program.

you can view the entire program and many other bktv programs onli. to booktv.org. type the name of the author or book in the search area and the upper left-hand corner of the page. select the watcher link. in now you can view the entire program. you might also explore the recently on booktv box for the featured video box to find reasons and major programs. steven hayward fellow at the american enterprise institute presents his second volume on the political career of president ronald reagan. mr. hayward recalls president reagan's public and foreign policy decisions and the former president's internal disputes with republican party stalwarts. the cato institute in washinon

dc this event. it is an hour and 35 minutes. >> i am john samples. trec the center for representative government here of the cato institute. and today we argoing to have what i think is going to be a very interesting and very funny fence about a new book by ronald reagan. this book, "the age of reagan" the conservative counrrevolution 1980-1989. [laughter] pardon me? excuse me. [laughter] seek, is already fun. a new book about ronald reagan, "the age of reagan" the conservative counterrevolution 1980-1989 i steven hayward. andanways ronald reagan continues to inform our politics. after the 2006 elections just to recall one way which also happened after the 1992

elections some members of congress were quick to declare the end of reaganismr the end of the reagan era. reagan has also found sometng of an admire an oval office. the current holder of the presidency said quote ronald reagan change the trajectory of america in a way that richard nixon did not and a way that bill clinton did not. president obama'sesire to be like reaganite think it's evident in his been much remarked upon. the last timi hosted a book forum about reagan was for john patrick diggins's book on the former president and many of you may know professor higgins has passed some but i recal his central thought of that event which was rond reagan had changed the world o foreign policy and therefore international affairs but he had accomplished very little at home

in the way of liberalization of the a society which was as you may recall of reagan's first inaugural central concern. today we are going to deal wi the question i various ways about whether john patrick diggins was correct abo reagan saltzman legacand we will stt with our author, kathryn. steve is the ft weyerhaeuser fellow ed aei. he has written biographies of presidents jimmy carter and also a biography of winston churchill and of course also two volumes that abo ronald reagan. the first volume is the age of reagan, the fall of the old the earl order whichteve was saying appeared on september 10, 2001. and despite that, has received publicity in much attention in the years since then. i would "a couple of assesents of the book, one by one of

presidenteagan's closest advisers ed meese tewes sd quote, steven hayward and his first volume has given us a fascinatin readable book about a unique era in american politics. is meticulous research and perceptive insights provided an informative and entertaining account of ronald reagan's re from hollywood to the presidency as well as an in-depth understanding of the times in which t@e ascent of kurd. mark lendee at boston college also said quote,he first volume sas a brilliant work of political history an an analysis. aegis a uly successful effort to treat the phenomenon of royal reagan within a brder historicalramework. steven hayward is a senior fellow at the pacific research institute and i wou like to welcome him to talk about his new book. [applause]

>> tha you very much john and thank you for the cato ititute for hosting us today. john mentioned how first of all u came out right before the events in the decade chain so much oamerican life and i thought knock on wood things would be different this time so i turned up in new york on tuesday to appear yesterday on the morning joe show on msnbc. i got in my room and was room 9/11. i am not superstitious and i thought for sure that would be a good omen until i woke up yesterday morning to see the news of senator kennedy's passing, the e-mail up my cancellation on morning joe. i have been very book so i urge l of you to pray for the health of robert byrd. [laughter] i thk i should begin by offering a brief explanation. it is pretty ironi a guyights

to that books and uses t word-- in his opening system. why i would spend the better part of a decade doing something so unconventional according to the usl publishing toy which is writing a long wide scales burling medith about ronald reagan and his effect on political life about events that but seemed to thoroughly covered d well understood by now. i have a lot of reasons but the ma point was that i was sure it even as recently as ten years ago that reagan was going to end up n eulogized but as i pointed coolidge dies by the media acamic complex. and of the words like a once popular republican president he woulde handled roughly by academia and so forth and afte a couple of years this would be the way it would unfold but then along the way over the last decade something surprising happened and unexpected. reagan's reputation started to soar and even a great my

libels started to like him. not all of them and that an important point we'll come back to. meanwhile at the same time a lot of conservatives have come to overly romanticize reagan and to see him to a superficial gnce and there and we need a broad gauge of nrative history that is a number of revisions i think in thi account. if you look at some of the liberal writers who have come to righted myrlie of rgan people like pat diggins, richard reeves. richard reeves ione of the more interesting cases. an artic in "esquire" magazine called why ronald reagan will make it in his biography of reagan was president right and the triumph imagination and i commented in a review that he could not have got a blitz of london in 1979 to a mentioned reece putting the words rgan entrapped in the same stence. others include, a decade after

his after he left office. at has been suggested by john this admiration tends to be limited to the cold war story to the foreign policy story and part of it of course is t revelations starting ten years ago, rean's extensive pernal writings in the '70s, which made us rlize he di a lot of his thinking forimself and is not merely a creature of speechwriters, staffers d advisers however we tento either ignore or get from his domest policies story and so i will pair phaseeagan famous movie line, whe is the rest of him? the conventional wisdom still tends to be that the rest of reagan's presidency was either a fiascos such as his domestic economic policy. every other paul krugman article seems t be about the dister of the reagan era domestically or other disasters such as the iran-contra scandal whichas a junior when disaster but my

argument this junction between agan's borns the crafted the and interpreted mistake and i think to many of the treatments of reagan tried to obstruct them which is tabarra from g.k. chesterton like trying to tell the story of a saint without mentioning god. as i say i had three or revisions in my book. the chief one that tries to reestablish the fundamental unity of reagan rteak rapter which both foreign and domestic pocy should be evaluated together. reagan central idea can be summarized witthe view that the unlited government, and limited government is a hostile to individual liberty both in judicious forms like communism but alsin a supposedly but 94 mike beaurocracy and reagan stated more less this view was clearly in his 1982 speech at westminster in london where he said quote, there is a threat posed to human freedom by the enormous power of the modern

state. histy teaches the dangers of vernment that overreaches political control taking precedence over free economic growth, secret police mindless bureaucracy l combining to stifle individual excellence and personal freedom. note the completion of secret police and-bureaucracy. showing that he regards the phenomena of political life as e continuum and not simply as the communist been different from the problems of western democracy. and that isot a coincidence he made clear in his next sentence. remember he is talking to the british parliament which i deeply divided over margaret thatcher in 1982. i am aware reagan would say adamonis here and toughout europe there is legitimate disagreement over the extent to which the public sector should play roe in the nation's economy an@ life. this was reagan's way of saying i know you were no this freedom

loving is me and maggie but tn he concluded the sentence, and one point all of us are united. reagan's domestic poli story is harder to tell in the foreign policy story because it is more diffuse and its results are more fixed. e1 some, y los some. and above all the human drama of the cold war with mckeel corbett job and ssa early in the book reag never stood in front of the federal trade commission and said mr. regulator, tear down this rule. he ditto have that attitudes i explained in the book and a lot of that, a number of his appointees did too and tre were dramatic closed-door committee have especially with tip o'neill were reagan used at times langue that would have done lyndon johnson pro. maybe later i will give you some samples. but above all i think we need to see if we can explain nor understand reagan seeming

contradictions. on foreign policy he talked tough about the soviets but tn reach arms conol agrments and that but it is made the pre-presidential reagan himself and indeed many conservatives were apoplectic over this turned, the central focus of jim man's book on the domesc scene , where again acquiesced to tax increases every year after the initial tax cut package o 1981 and in another area to pick one example, agan agreed to impose voluftary auto import restraints on japanese automakers whichannot by any stretch of the imagination be calculated as did the ssible policy by and a friend of open markets and freerade. indeed bill is gaylon is among the realist to reject the idea that the reagan years should be understood as rutledge terese. in the end there was no reagan evolution. i have a lot of sympathy with

bill's analysis ani will be interested to se in what ways the bennie bill has revised its judgment 20 years after writing that but i think we miss important aspects reagan steak then maybe ms. judge the results if we wait things on a purely abstract skeel. ..

. >> onhe other hand,n hower

the prentation at the letter he said among other things that is a possible that we have permitd ideology political and economic philosophies and governmental policies to keep us considering the very al everyday problems? mr. president should we not be concerned with eliminating obstacles which prevent our people to rch there cherished goals is not possible they are born of government objectives which have littl to do with the real need and desire of our people? it is sentimental that his adviser was appalled at and they tried to keep him from sending the letter and thete department roach the sap the stuff and reagan wrote the others bashing the soviets. i am guessing they found tt deeply confusing.

[laughter] then december 9881 re again said i have always recognized tt ultimately there has to be a settlement, a solution. the other way is you are trapped in the back of ur mind with the inevitability of conflict that will end of the world. byhe way he is here saying almost exactly the same thing churchils said about reaching age 81 settlement over the cold war division. churchill used to say if i could just sit down with stolid wants a weekrid be no trouble at all after the war shirley with h judgment but with the over confidence certain political leaders have.

reagan would drive his advisers they would say would make them see reason they thought this man was 94 by the way this explains the same kind of overconfidence and diplomacy you see with obama's saying he will talk to ouradiant out preconditions until people got to him about at. reagan found somebody to talk to for real he did have some genuine reform instincts although they dply confused he was much less of machiavelli's ey an inspector clue so bun reagan perceived hereaseone who you could generally make a deal with a lot

more could be said i will end with a a lot of us to wonder why didn't he increase the government more? my conclusion is reagan was more successful than rolling back the domestic government empire. iefly because it is a harder problem. the sovi union wasasy compared to the epa. that is my favore example. governor mitchell daniels mmentethat the reagan years would be for conservatives but what the kennedy remains for liberals to break their experience a conservative calot at the same time no less th is plainer than the damage of decades cannot be repaired in any one administratio there is

parallel between his governorship and his president say. and unable to get a cabinet department and he also understood future presidents may lack in a resolve to try to curtail government growth and here we are today. starting 1987 he proposed repeated theive constitutional amendments he called the taxpayer bill of rights and there's the interesting symmetry with the economic bill of rights of franklin roosevelt in the mid-40s pro reagan always advocate fop a balanced-budget amendment but he had three others but thether three were a supermajority requirement fifth, a two-thirdsote of confidence a supermajority

vote, sorry, number two was a constitutional spending limit the federal government could not spend a certain percentage of gdp and finally what would happen wholly unnecessary is separated negative stage prohibition of price and wide -- ge control nobody was thinking about that but today the federal government is controlling the wage of bkers soon it will be controlling the wages may be of the heah-care sector it is not hard to think why don't they bring back wage and price controls? it worked for nixon and. [laughter] the second solicitor general said the reg administration tried to make a revolution the proposed dismantling that a credible the past half century.

as revolutiona as it was a required me ld than ever before. this wasot in evidence that meant to be a debate with republicans one of the thingin the book is h reagan was frustrated of his own party. i quote the line of my judgment mit defer exactly how successful we think reagan was what he tried and why he didnt always succeed with the larger objectives because there may be

a right of sen trance -- cenic government rather than having the superficial aspects. thank-you ver much. i look forward to the comnts. [applause] >> we will be available after the event to have lunch and and steve will be available you can purchase his book and he will be available to sign it and chat with you with this important work. james mann a foreign policy institute andesidt at the school of international studies at johns hopkins. senior writer and resident for strategic international studies and served as a staff writer to look at several newspapers at e "os angeles times" where he

had a position as of zero retrve and and foreign affrs columnist. writing h numerous books have received several awards including the national press ub award for diplomatic correspondents in 1993 and 1999. many inheudience ma well know one of his earlier books the rise of the bkans, the history of the war cabinet and his most recent ishe rebellion which he brought along wch was just plished in march this year and in the usual places. we're very lucky to have him here today to comment on thi new box. [applause]

>> offer a few comments on the book then also theig question two and a writer coming t grips with this. and ronald record -- ronald reagan. i am the consvative on the nel. given my writing about china i amardly claimed by t libe i classify as the o'connell classed -- o'connell glass. but i do notant to know my views about health care that is not what we are here about today. but on ts book, onteve's book, i find, i really like the

book and i think that the passages which areany with ronald reagan and the coldar e remarkably good history and having just gone over history myself that th book's get reagan right whe many commentators dome. in particular this book manages to take into account as i try t re again and to communism or the views with which she took office but but also the second terms the desire to limit or abolh nuclear weapons and his optimism about the benefits of genuine diplomacy wi the sovt union. he has a passage here which i

think at se rean right he balances hard-line anti-communism to reduce nuclear weapons and reduce agreements agements -- reach agreements th the soviet union. in the process he includes, as i do, the battles between the conservatives and reagan during his second term of the quota th he gave you was representitive and one of many. becae ithroughout this. wants mchale gorbachev takes office there are 43 years, divionsn washington about what he means and whether he represents a significant change. the usual conservative view

which was shareby many in the intelligence community and which was shared by nine conservatives of a different kind like richard nixon, bnt scowcroft, was really gorbachev did not represent significant change it was a charismic fac40 essentiay e same policies. and that might have been possible in 85 but as time goes on, it becomes less and less true. i will say, don't agree wh everything in the book tre are parts that are clearly a conservative writer right team for a conservative audience. when steve speaks about the media academic complex i know what he means.

that is one side of the story there may be the ae i "wa street journal" complex that they are not without connections of their own. so those parts of the book i don't agree with. there is another point* where the book compares or equates "the new york times" edirial pa. [laughter] my ownomplete the different take when i saw "the new york times" editori-page is a least they said something when often it says nothing. there are, for any writer or off third dealing with rean in this period, several big questions that we had t come to grips with. we had to have been answered or

interpretation one way or another. and in order of importance. first of all, why was gorbachev appointed? there were political interpretations of this tha steve's book rightly criticizes the liberal argument of the early '80s that rgan's polici 1981/83 will rise in here in me to a new hardle soviet leadership. it was not borne out in the way it was argued. on the other hand, i am not quite sure, it is an open estion. to the extent that politics matter at all i do think that

gorbachev was appnted simply because he looked like he would have a pulse for another 30 years. [laughte health and vigor were the main factor. you can even argue that he was appointed becse the soviet military among others thought he would revive soviet economic power and somehow figure out a way to advance soviet technology that he was appointed as the hard-liner i think that is speculative. the biggest this is his first and second term on soviet policy? had to formulate the relationship with those are the years, a defense buildupa strategic defense initiative the evil empire speech and others in national security directive tt

specifically lays out a goal of challenging the soviet power and the 8588. where the main defen is where bregenz says specifically that his views about the evil emre came from another time and another place. and his arms ctrol treaty, the inf treaty which was the first arms-control treaty ratified by the senate the first successful and 18 years. there are several ways to formulate this. one staken different ways from the right and left is to say that reagan's term, diplomacy with gorbachev did not matte because the soviet collapse was

inevitable. the left-wing version of the inevitability argument that it was the inevitable result of truman policy of containment that over a period of decades contained -- containment worked so the sovieunion collapsed which that is all true but does not address the question of how and when it collapsed f crow the differing conservative argument that i heafrom time to time is reagan's second term did not count. what really coued was the first termauseeagan buildup american denses and the soviets gave and record is a traditional view of reagan. he built u american defense and gorbachev responded by deciding

to tear down the wall and i explained in my book why this is not true. the age of reagan also doenot accept this. both steve a word and i are persuaded he ces the argument of a scholar that points out the soviet uni despite it all, despite the american dense buildup the soviet uni was in his words, thargically stable, it had enough missiles and nuclear weapons and chemical and biological weapons and hardware to go on for years it is one thing to say that the sovi union would not try to match the united states and it is a completely different thing to say it would go along with the revolution in eastern

europe, the fall of the berlin wall. that was the result of the policies of the second term. arset was of the first term. there are other explanations but how do not explain the second term? but i thinke agree the stalled hold but reagan was captured by moderates in the second term. you do hear thisormulation from conservatives that nancy reagan, george shqltz, colin powe somehowaptured th mind of ponald reagan. this is in a book by thomas agreed who served in the reagan administration. the evidence does not support this and reagan really made his

own decisions. he may have seen passive from time to time are long periods of time but he was a decision maker. you can point* with any of these people that who are supposed to capture reagan and the time they did not get their way. george shultz d notant to give the speech "mr. gorbachev, tear down that wall" end quote. broke there is alsa formulatio that all of reagan's soviet policy in the second term was a reaction to the iran-contra scandal, his presidency was in trouble and it was a reaction to the iran-contra and the problem with th is it does not fit the chronology. the main, the most important

thing it or single moment of t diplomacy which was the summit where reagan and gorbachev talked about eliminatinguclear weapons was before the iran-contra scandal broke. fact is easy to dismiss. -- ofhat is easy to dismiss. themre still important problem to address and it is the most possible t knowhe answer but is how much comment of his policiesis the results of a long-term strategy, from the beginning and how much s a very svy response to events? one theory that postulates a long-term strategy is reagan took office planning to bring

the siet union to collapse. i do hear this from time to time. i do not find iin a particular book. and in fact, caspar weinberger his own defense secretary rejects the idea that there brought the soviet union to collapse there were policies med at challenging the sovie i think for sure bill casey s cia director was pushing away but i cannot evan see the beginnings of a reagan strategy over eight years to bring the soviet union to collapse. steve pay word book brings to me a more sound version of a long-term strategy that reagan's

early policies were meant to strengthen american's hand in negotiations wit the soviet union that you did not enter intond tl you have strengthened america's defenses and that strikes me as something that makes some sense. to me, what rate again was very sklfully responding to the events that heid recognize that gorbachev had the potential to be an agent of change in the soviet union when many others in the united states did not. and reagan was rna a very skillful negotiator. this may be a very sick part of

his strategic negotiations and part of it is a skillful response to defense. where i am happy to plead guilty where steve complains that people separate reagan's foreign and domestic policy what is the relationship between these events ithe foreign policy and domestic policy? and i think he argues it is one piece and it makesoense to parate them out. on fact, i just plain disagree. to me, this is a further

eight -- bunny conversion of the theory that the united states and the soviet union have become more are becoming like each other. ..

he is also serd as director of economics at the ford motor company. professor of economics at the university of california berkley and los angeles, assistant director the federal office of management and budget, a defense analyst at the rand corp., the director of scial studies in the office of the secretary of defense and director of program analys division of the institute of defense analysis. someone with that background is indeed well placed tell us a great dl about what is happened in american history during the reagan era and before. bill is read on many public policy iues. in 1971 bureacracy and representative government is considered a classic. his mt recent book is reflections of a politic

economist selected articles on government policies and political processes. plea welcome a bill. [applause] >> thank you john. the most relevant of my books of course is theook called reaganomics in which i summarized the development and the effects of the reagan ecomic program over its two terms. steve's book is simply the best comprehensive history of the reagan administration. no other comprehensive history is anywhere near as gd. noartial history, the no good section is as comprehensive as what steve has come up with. let me quickly summarize what i regard as reagan's major achievements. in foreign policy, the end of the coldar, the breakup of the warsaw pact, the breakup of the soviet union, these latter two

phenomon were in the late '89 or in the early 1990's, but they were clearly a consequence of the developments during the reagan administration and i will develop on that later. one other thing in which i don't have a sufficient appreciation and y be coming to an end i that reagan pact the courts. i think that that effect of his administration, he was the first republican to serve a full eight years i sense think coolidge or something like that, so he packed theourts with like-minded people and that has been a very important stabilizer in the american legal history. but let me focus primarily on domestic and specifically economic policy. the major achievements, the inflation rate was reducedo

3.8% in 1982. it had previously been regarded as impossible to reduce the inflation rate by that magnitude over such a quick period of time. there is quite strong economic growth from 1983 through 1989 and pardon the consequen of the fact that a top tax rate was reduced from 70 in 1980 to 20% in 16. these by themselves or really quit dramatic changes. let me now address the inflation and tax issue. as late as 1980 or 1981 when the left had an oortunityo testify in congress on the reagan ecomic policies that general physici of e left was that the reduction of the budget deficit and price controls was necesry to control inflation. in filez and remember had gone up from at the time when nixon imposed his wage and price

ntrols in 1971 the inflati rate was 4.4%. in 1980 the inflation rate was 12.5%. as a consequence without taking, without dointhe sorts of things thawere necessary to control inflation. but as late as 1981 the left was ying that in order to control inflation you have to, you have to reduce budget deficits, and you have to maintain whatever controls over particular pris and particular segments that are necessary. the ftxplanation of inflation was typically prices are going up in some sector and that is causi inflation. prices did go up substantial in energy in the 1970's but that was not of course the reason we have inflation. what happened? what did reagan do? by the end of january o1981 he had eliminated price controls o

oi and that eliminated the cues in gas stations. so of you may not remember that period but fo a good bit of that period he would go to a gas station and it took an hour to get to the pump. that elimited the cues in the gas stations overnight and then as economic program in 1981 of course was going to increase the budget deficit. we knew that at the time. the consequce of an increase in the rate of defense spending d a significant reduction of tax rates. now, so that perspective of the left should have been rejected by that particular experience in the sense that we did just the opposite of whathey recommended, and still brought inflatn down more than two-thirds within two years. there is a consequence of very tight monetar policy.

the single most important action by reagan in that period of time on inflation is that he gave paul volcier who had been appointed by jimmy carter's strong support to use monetary policy to control to bring the inflation rate down. cart had appointed loker without knowing who h really was. he appointedokor as a consequence of a recommendation om tony solomon in the treasury departmt. fakner started tighteng the money supply very quickly in the fall of 1979. carter reversed him on that matter because 1980 was a presidential election year s volker did not have the support of the president to maintain its tight monetary policy that he had started in the fall of 197 but when reagan came and he gave volker strong supporto impose

tight enough netary policy to substantially reduce inflatio and i worked. within two years, much more ickly th most people anticipated. the inflation rate wa brought down by more than two-thirds. on taxes, the perspective of reaganites at the time was the taxes of a different effect on the economy then was from the conventional position, of the convention left. the left typically enteb did the effects of taxes on the economy in terms of its effects on demand for goods and services and for labor. we interpreted the effects of taxes from the economy primarily in terms of its effects on the incentive to work, save, invest in increasur productivity and for that reason we recall supply-siders' we focused on the effect taxes on the supply about what

did not on the demand fo output. so what d we do? taxes were-- top marginal tax rates for reduced from 70% to 50% in the first yeain 1981 and then in the 1986 tax bill, the marginal tax rate was reduced further to 28%, th top marginal tax rate was reduced to 28%. at the same time, most people below the median inme were taken off the federal income tax roll. right now something le 96% the federal income tax sustained by the top half of the income distribution. but there are some lessons to be learned from that and this we have learnedometimes, we have

lened me wrong lessons. the residual supply-siders have left us with two quite incompatible assers about the effect of tax re cuts. onis the asserti that tax cuts are self enhancing. that has been an interpretatio of the laffer curve but it is not arthur's own intpretation but these tax cuts are self financinso you don't need to worry about the deficit. this is appointed the of the dick cheney apparently still holds. you dot need to worry about tax cuts because they don't increa the deficit because there's self financing there is another perspective entirely incompatibl wh the first. the start of the-- that tax events lead to spending cuts because they start the peace. they are all to my people who call themselve supply-siders

who had one time or another arculate both mf these positions and of course they are inconsistent. iturns out the empirical evidence particularly since 1980 ishaboth of these are wrong. tax cutsre not self financing. their tax cuts that have incrsed revenues were you have the high esticity of the tax se with reect to the tax rate andot as in say capital gains. or where the absent tax rate is so very high and win the top marginal tax rate was 70% it is very likely reducing that rate by some and not with self financing but not necessarily all the way down to 20% and even the capitol gainsax cuts by george w. bush in 2003 look like theyight have been self financing but that is not the general case with respect to tax cuts. and the evidence, although it,

although this process by among oher people milton friedman and gary becker is just inconsistent with the facts. the modern history suggests that if you cut taxes the demand for government service goes up. you cut the price of most anything good or service, th amount of that goo or service that is demanded goes up and what happens is wha is now confirmed by the evince, is that reducing the tax relative tax burden on the united states, redung the tax share of total gdin the united states has been strony associated with increasing government spending, not starving the beast, not a reduction. another thing that is important to recognize ishat l the reagan is remembered for hisax cuts in 1981 and mid-1986 in

most other years particularly 1982, 1983 and 1984 he increased taxes so he did not have, he did not have a tax cut under all circumstances perspective. the 1980 tax increase had a history of an analysis withi the council of economic advisors i dung staff member who now a professor at boston, that when given the 1981 tax cuts to bring inflation rate down as rapidly as was in fact happening it actually lead to an negative tax rate on certain kinds of buness investments. the 1981 did n take into account the interaction between the effect of the tax cuts, the tax rate cut and inflation itself so that was the primary correct reason i think for the 82 tax ancrease.

the 1983 tax incase was the consequence of the fact that reagan's 2001, 1981 proposal on social securidy did not get a single vote in the senate and so he appointed a commission to address social security headed by alan greenspan but the recommendations basilly came from dhaa who was in greenspan's chieff staff on that particular committee. a long story among many of us in the reagan administration, a question that many ofs in the reagan administration asked each other, why did come away of people ce to hate him so quickly? the answer is it saves time. [laughter] in any case and darmon was a very bright guy and he was an

aide to baker, and so h wac involved i any number of impot decisions. let me now turn to some cases o very discriminating judgment on similar issues in which reagan'c judgment proved to be rht in bo cases. what is that in the summer of 1981, professionalir traffic comptrollers, federal employees, went on strike. they tught they could get ay with it for two reasons. one is that they had endorsed reagan and the0 election, or three reasons. the send is reagan himself had be a union president, president of the screen actors guild and the third that patco is a monopoly. they are the only ones who are allowed the time t be air traffic comptrollers.

reagan went on television and said thiis an illegal strike. we a going to do whatever we can to maintain air traffic in part by using military air traffic comptrollers and the strike was, the strike was brokel. that however was misinterpreted a lot of the press as somehow reagan's anti-union pition, not really true. we did not intervene at all in a very much larger a extended strike in at&t two year later, so there was, we had a neutral position with respect to at&t's strike in 1983. reagan appointed man named bill baxter to be the antitrust assistant attorney general in the department ofusti.

baxter was a dynamo. within months of being on the job he dismissed the 15-year-old antitrust suit against ibm on theasis that the technology in that area had gone way beyond what was, what was the justice department's conrn 50 years bere that. but at the same time, not lg after that, baxter was involved in the breakup of at&t and two we three different organizations, so these were discriminating judgments and i think the judgments in which case was correct in both cases. another one that i think it's quite interesting. reagan after some controversy within the administration authorized an invasion of the tiny caribbean isld called grenada. that followed aituation in

which thhezbollah had bombed the barracks, the marine barracks in beirut but reagan had, reagan head authorized the invasion of grenada pririlyo reduce the cuban influence in the caribbean because the grenada political system had been basically taken over by the cubans and that, given the marine, given the army and marine barracks in beirut gave pele the impression that we were in for a nber-- another round of military activities. one od the more important things that think reagan ever did in foreign policy is polling the maris out of aoo that kept us fm getting volved in the middle eastern war in 1986, and polling the

marines out beit basilly and of the argument that's the political developments in lebanon did not represent a national security threat to the united states. that ia principle that i wish that george w. bush and george w. bush had followed. another interesting discriminating jgment is that rean's public and private views about most of the soviet leaders were absolutely devastatingly critical. at the same time, this man went to reyavik with gorbachev and pulled offhat was basical an opening to gorbachev and that's a plus the rat the defense buildup in the earlier part of the 1980's was i thinkhe primary thing that led to the end of the cold war and

ulmately the breakup of the warsaw pact and of the breakup of the soviet union itsel there had been a lesson learned in the meantime, a lesson that we were slow to learn but i ink was more widely understood in russia itself in the soviet union. in the 1970's, the cia, the central intelligence agency, finally recognized the soviet defense budget was a lot larger share of their gdp tn what they had been telling us for a long time. their earlier position waq the soviet defense could remain indefinitely because i was not that much of a bger sharef gdp than ours. what happened in the 1970's when george h.w. bush was actually director of the cia, the cia recognized that they had gross

overestimated theize of the sovi gdp. they more or lessorrectly estimated the size of the soviet fense measure but substantially orestated, estimated the size of the soviet gdp and that gave an increasing number of people in the united states, a rather large recognition of what the soviet leads had known for some time, that the siet defense budget was a much bigger burden on them then what had previously been thout about inhe united states. that, that recognition plus the u.s. defense buildup, the part of which think most soviets with e sdi program, thstrategic defense ogram and reagan's opening to gorbachev at the end of the period was a think the primy reason for these truly dramatic developments in foreign

policy. reagan's judgement on people was really surprisingly good. i think he made extraordinary judgmes on people because of the two most conspicuous ms. judgement said think were the employment that al haig as secretary of state in 1981. we came close to having al haig becoming president after reagan was shot. [laughter] that was really a bad judgment and i think also the appointment of don reagan as the secretary's chief of staff was a bad judgment. don we can i thought was a good secretary of the treasury but he was a terrible chieff staff in the second term but as the rule i thought that reagan's judgement about people was very good was correct in s judgment about most of the soviet leaders. also i think he was correct in his judgment about gorbachev

that this was the man whom he could talk about big issues like getting rid of nar weapons, a substantial reduction of nuclear weaponsn our parts and coming to a peaceful relationship or a period of time. major mistakes. steve had mentioned trade policy was the thinkne of t worst records of the reagan administraon pticularly with respect t japan. we were very depende on the japa had beeny dependent upon japan for any number of reasons but we force the japanese to impose a voluntary export restraints. instead of imposing a quota on their porch we force them to enforce voluntary export restraints on their sale of cars and semiconductors to the united states. where the budget deficits in this day?

i must have knowledge that i was more concerned about these budget deficits in the '80s than i am now. the budget deficits were primarily a consequence of the rapid increases in the defense budget. so the question is whether the dget deficits were a mistake the consequce, the decion about whether the dse buildup was a mtake. you want to know that th weinberger'sroposals had very lile support in theabinet and in the white house with the exception of the president. i had worked for 13 years in defense and hired positions and served a couple of years as an associate director of rmb. wienberger's proposals were on the defense budget, were demeaning il the sense that they trted us like ignorant people but he got awa with it and unfortunatel, fortunately or

unfortunately i think it may very well be that the big increases in the defense budget which was not fanced by taxes, in other words by borrowing in retrospect may have been a good decisi because it think it was one of the key elements in bringing about the end of the cold war and the other relationships. so there were mistas. trade policy was a mistake. i have come to a rather different view of the budget deficitshan i had at the time and about the defense buildup at the time. let me just give you one little story. weinberger came to make a presentation on hi budget, defense budget to the cabinet and he brought some cardboard cutouts with sort of a six-foot maureen just being his budget and ahree foyt tony soldier as being the budget-- and this was

the quality and character of the presentation he made on t defense budget before the reaga cabinet so he trted us like ignoramuses but i think it was a decision on the defense budget to finance it by borrowing revenue from taxes was probably a good ia. ank you. [applause] >> what bill does not mention is that he recounts these exact same stories but first of all having worked on the budget as a calculor and everything stockmen could not believe it. weinberger showed up with little cut out some point did it one of them with a jimmy carter. stockmen lost that battle. that ithe one name that actually we will get to and the q&a. david stockmen played a great role in continues today in other

ar but his book is important on domestic issues here. we would like to to question and answers. we have run littl bit over our plan time but we still have ample time for some questions from the audienc and please, we are going to havto speak in a fairly loud voice so we can hear you because of the sound problem bu please ask us the question and also if you want to directed to one particular person on the panel please indicate that in finally please indicate to you are and t institutional affiliation you might have. speak up. the gentleman in the back i believ was first. >> i am attorney here in the city. i am curious, nobody, when we discuss th difference between the rean first term and the reagan second term in terms of foreign policy with the soviet union, iave always believed the key ent and there was a

genuine on both sides spoke in the soviet union and on the side of the united states, defense was the key event that started the reagan détente and that-- of the panel would like to comment i would appreciate . >> we both talk about it in our books. the question i refring to a large nato exercise in november of 1983 that coincided with the installation of the intermediate-range missiles which was so controversial and there's some evidence, i go to the mix character of this evidence of my mind becau some evidence the soviet union generally thought it possible we were preparing a printed strik agnst them and they in response ponder their own preemptive stre back in lisl bubble subtwo reagan who is alarmed abo this when he is ll and he says talk of the soviet union think we would attack them? i tell a story in great leng in