Yesterday, i posted on my Substack at a long interview that my late colleague at the Hoover Institution, Martin Anderson, did about his time with Nixon. In it, he revealed how quickly Nixon came to Marty’s position against the military draft in 1967, relatively soon after meeting Marty.
There’s a lot more fascinating in that interview. Marty talks in detail about Ronald Reagan, who was very different from Nixon. Here’s one about Reagan’s intelligence and knowledge.
I once described him as heartily ruthless. He seemed to be friendly, jovial and kind, never argued with anyone, never complained. But if you shook your head and thought about it a little, he always did it his way. It was like there was a steel rod in the middle of him and everything you touched was soft and blurry except the steel rod in the middle. He always did it his way. No matter how many people talked to him, no matter what happened, he always did it his way. If you got in the way, you were gone and fired. He never enjoyed it, he’s just gone.
I think if you really want to look at Reagan, one of the things we’re showing with this new book that we have is something that I knew from dealing with him. He was incredibly smart. I know this doesn’t sound reasonable, but he was incredibly smart. I’ve dealt with professors at Columbia and professors at Stanford, but he could look at something and understand it, understand it, turn it around, work with it and play with it. He was incredibly fast. I would say he had a brain similar to – and I would talk to Milton Friedman or Ed Teller and Arthur [Burns]All those guys, he could stay with them.
Now he has hidden it. He simply withdrew. He never had an argument with the staff. You could have ten different people tell him the same thing and he would just listen. He never said to them: Look, stupid bunny, ten years ago I wrote an article about this, a long article. He just said, that’s an interesting idea. He listened to many of the policy issues that were presented to Reagan by different people over time: that’s very interesting. Then when he did it, even though he had decided many, many years ago that he was going to do it, all these people were excited. He did as they told him. He was happy with that, it didn’t matter to him.
He always said privately: There is no limit to what one can get done if you don’t care who gets the credit. And he was just very smart. The second is that he felt like he was lazy, that he was taking naps. Well, I traveled with him for almost four years. He never took a nap. It was total nonsense. In fact, he worked all the time. We found evidence with this book in the form of the handwritten documents and so on that he was writing all the time. He studied, he wrote, he worked all the time, privately. As soon as he came out in public and assumed the public persona, he was friendly, jovial and talkative.
For some reason I’m thinking about Reagan today. I never voted for him. I wasn’t able to vote until 1986, shortly after I became a U.S. citizen.
Although I enjoyed working for Martin Feldstein for two years while he was chairman of the Council of Economic Advisers and I was a senior economist, I thought Marty [Feldstein, not Anderson] was one of many intellectuals who failed Reagan. A story here is relevant.
Marty and I worked with people from the Office of Management and Budget, the U.S. Department of the Treasury, the Department of Health and Human Services, and a White House policy shop on a proposal to make employer contributions to employee health insurance. above approximately $1,500 per year of taxable income. That doesn’t sound like much, but $1,500 in 1983, adjusted for inflation, would be over $4,700 today. The idea, which many health economists and many economists in general shared, was that employers and employees would face the right marginal incentives so that there would be little or no preference for health insurance over taxable wages and salaries. ($1,500 per year was lower than the average employer contribution, and if the $1,500 were not indexed for inflation, the bias would become smaller and smaller over time.) But Marty wanted to go further and insist that employers be able to deduct from their premiums. taxable income their contributions to employee health insurance, they should purchase insurance with a coinsurance rate of at least 10% and a minimum deductible. (I forget the deductible amount.) I argued with him. I said the proposal without those requirements gave employers the right incentives and that he said he somehow knew better than them. He had no good arguments, but insisted that I accurately represent his position at interagency meetings. I did. If I was about to say something that Marty was thinking but I didn’t say it, I would say, “The Chairman believes that…”
It’s interesting and entertaining that health economists across the country heard what Marty was advocating and wrote to me asking me to talk him out of it. (In the late 1960s to early 1970s, Marty had been perhaps the world’s foremost health economist, before he moved on to other issues like Social Security and corporate taxes.) So I went up to Marty and said things like, “Joe Newhouse said hi and also asked me to tell you that he thinks dictating the terms of employer-provided health insurance is a bad idea. Marty would acknowledge the “hello” part. About the third time I did this, in response to the third letter from a health economist, Marty said, “Okay, David, I understand. Cut it out.” So I did.
Anyway, back to the story. There was a Cabinet meeting at which Marty presented the proposal. Normally he would have taken me and I would have been one of those people you see in the photos sitting with my back against the wall and not at the table. He didn’t invite me, and I didn’t hear about the meeting until after it was over. I heard it from a colleague at another White House store, and this colleague was invited to the meeting by his boss.
I think Marty was on to me. I was the kind of person who, if I saw something I didn’t agree with, would say something. The idea that Reagan and a lot of Cabinet secretaries were there didn’t intimidate me at all. So I think Marty, somewhat reasonably, feared I would say something. If I had known about this meeting in advance and had known that Marty wasn’t going to take me there, I would have said, ‘Okay, I understand. You can say the earth is flat, and I won’t say anything. Oh well.
I keep getting sidetracked, so here comes the part about Marty and Reagan. When I heard from the colleague at another White House store after the meeting, I went to Marty to ask how things were going. He said: “It went well. Even the president understood.” Even then, after following Reagan’s thinking for about six or seven years, I thought Marty Feldstein underestimated Ronald Reagan.