Authors: Bob Colacello
Several months earlier, UPI had reported:
Betty Newling Bloomingdale, a wealthy person prominent in fashionable society, was fined $5,000, given a one-year suspended prison sentence and placed on a year’s probation . . . for not declaring the full value of two Christian Dior dresses she brought to the United States from France. Testimony showed the true value of the dresses was $3,880, but Mrs. Bloomingdale presented an invoice to a customs agent showing the purchase price as $518.65. The reduction was made to avoid the import duty. Mrs. Bloomingdale, who lives in Beverly Hills and whose husband is a member of the New York department store family, pleaded guilty last August 23 to a charge of concealing an invoice from a customs inspector. Federal District Court Judge Lawrence T. Lydick, who imposed the sentence, told the 4 7 0
Ronnie and Nancy: Their Path to the White House defendant that she “deserved the contempt of society which has served you so well.” Mrs. Bloomingdale told the court she was “truly sorry.”34
The close connection between the Reagans’ social and political lives during this period is perhaps best illustrated by Justin Dart’s promotion of Arthur Laffer, the brilliant young economist whose revolutionary “supply-side theory” would provide a major theme for Reagan’s 1980 campaign and greatly influence his economic policies as President. Laffer was one of a group of economists who had attended a December 1975 meeting with Reagan organized by Martin Anderson, a former Nixon aide who had been Reagan’s senior policy adviser on domestic issues for the 1976 campaign. It was at that meeting, Anderson recalled, that Reagan probably first heard the supply-side gospel as preached by the thirty-five-year-old Laffer: “If you cut tax rates, revenues may go up. If you raise tax rates too much, income goes down.”35 As Anderson pointed out, the work done by Laffer and Robert Mundell, his mentor at the University of Chicago, on the relationship between tax rates and incentives to invest and produce
“was way, way outside the mainstream of the current economic thinking.”36 Mundell would eventually win a Nobel Prize, and Laffer would become a near household name for the Laffer Curve, a simple, graphic illustration of their theory.
For Reagan, who had been railing against the graduated income tax since his days as a high-bracket Hollywood star, Laffer’s ideas had natural appeal.
It wasn’t until the following year, however, when Laffer left Chicago for the Charles B. Thornton chair of business economics at USC—and Dart, a USC trustee, “adopted” him—that he began to see Reagan frequently. “I got very involved with Reagan through Justin Dart,” the economist told me. “I was very impressed with Reagan. He knew his stuff, he talked about it, he’d come to meetings with congressional testimony paper-clipped where he had a question he wanted to ask.”37
A month after Laffer arrived in Los Angeles, in September 1976, Reagan wrote a column titled “Tax Cuts and Increased Revenue”: Warren Harding did it. John Kennedy did it. But Jimmy Carter and President Ford aren’t talking about it. That “it” that Harding and Kennedy had in common was to cut the income tax. In both cases, federal revenues went up instead of down . . . the presiden-Reagan vs. Carter: 1977–1980
4 7 1
tial candidates would do us all a service if they would discuss the pros and cons of the concept. Since the idea worked under both Democratic and Republican administrations before, who’s to say it couldn’t work again?38
A person close to the Group told me Laffer was a regular guest at Punky and Justin Dart’s dinner parties, where “he was always going on about cutting taxes.” According to Laffer, he was in and out of the Dart house almost every day, and he and his wife vacationed at the Darts’ place in Pebble Beach. “USC had the Dart Center for the Study of Private Enterprise, which I was head of,” Laffer explained. “And I got to know Jus. I adored that man. He was one of the neatest guys I ever met in my life, a guy who did things and was not afraid to overstep himself. His basic political principles were simply pro-growth, pro-business, supply-side intuitively. He was not Holmes Tuttle, who said balance the budget, don’t cut taxes. For a crusty old curmudgeon, Justin Dart got it.”39
Laffer’s heterodox views and brash personality made him a contentious figure within the Reagans’ inner circle. One who was not so sure about him was Nancy herself. He, in turn, found her impressive but intimidating. “She was very strong, and everyone knew how much influence she exerted,” Laffer told me. “There was no ambiguity
ever
with regard to her power—personally, socially, and on policy levels. If she really had a strong view on something, she could put it out there. If she thought someone was disloyal to her Ronnie, that was a nuclear holocaust! She was probably the most loyal wife that ever walked the planet—and you just love her for that. But any dealings with her were difficult at best.”40
To illustrate how tough Nancy could be, Laffer told me about a dinner at the Darts’ in the spring of 1978 with her and William E. Simon, the Wall Street wheeler-dealer who had been secretary of the treasury under Nixon and Ford. “It was just the five of us—Ronnie couldn’t make it,” Laffer said. “Jeff Bell, who had been a top policy guy on Reagan’s staff in the 1976 campaign, was running for senator in New Jersey in the primary against Clifford Case, the liberal Republican incumbent. I said, ‘Hey, what’s the boss doing? Is he supporting Jeff?’ ‘No, he’s not,’ she said. I said,
‘What? He’s not supporting Jeff?’ And I could tell she colored a little bit.
When you saw that you knew, ‘Stand down, officer, right now.’ So I shut up. Bill Simon, who was from New Jersey, said, ‘Yeah, what
is
this?’ He just goes right into it. And she gets up and walks around the table, and she’s got 4 7 2
Ronnie and Nancy: Their Path to the White House her face this close to his. ‘Don’t you
ever
say anything nasty about my husband.’ Right in Simon’s face.”41
By 1977 the supply-side doctrine had been taken up in a big way by the
Wall Street Journal
as a miracle cure for stagflation—the combination of low growth and high inflation that plagued the economy for most of the decade. In early 1978, Representative Jack Kemp and Senator William Roth of Delaware introduced legislation to cut taxes by 30 percent over three years. Reagan, who had kept on friendly terms with his onetime staffer and football star turned politician, was one of the first Republican leaders to endorse the Kemp-Roth Bill, which was dismissed out of hand by congressional Democrats and President Carter. Reagan also lent his support that spring to Proposition 13, the California property-tax-limitation initiative, which was overwhelmingly approved by voters in June. Reagan, who as governor had watched a similar proposal of his go down to defeat—and who was not above seeing himself as a prophet ahead of his time—felt vindicated.
“By early 1978 we all thought he’d decided to run again,” said Lyn Nofziger.
“Not that he told us, because he didn’t. He had a thing about throwing his hat into the political ring too soon and his idea of too soon was a lot later than mine.”42 Following his usual pattern, Reagan finally allowed a so-called exploratory committee to be formed in the spring of 1979. The formal announcement of his last-chance quest for the presidency, and the forsak-ing of his very profitable private career, would not come for another nine months.
Until then Reagan continued to give speeches across the country to groups spanning the social spectrum from the National Roofing Contractors Association to the California Thoroughbred Breeders Association. In January 1978 alone he gave twelve speeches in seven states, and one night in Chicago that April he squeezed in both the Eisenhower Silver Jubilee Gala at the Palmer House and a Bonds for Israel dinner at the Hyatt Regency.43 Reagan grossed $817,000 during 1978 and the first six months of 1979, more than three quarters of it from speaking fees, including the $72,000 he charged Republican organizations and candidates. His highest fee, $10,572, was for a speech at USC.44
To burnish his image as a statesman, Reagan, accompanied by Nancy, traveled to Asia in the spring and Europe in the fall of 1978. In Japan he met with Prime Minister Fukada, had dinner with the leaders of the Diet,
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and addressed the Keideran, the country’s most important business association. In a pair of gestures designed to please his right-wing base and show support for longtime American allies, he also stopped in Taipei, to pay a call on Chiang Kai-shek’s son, who had succeeded him as president, and Tehran, where Shah Reza Pahlavi’s regime was struggling to subdue a revolution in the making. Britain, France, and Germany were on Reagan’s European itinerary, which included a second tête-à-tête with Conservative Party leader Margaret Thatcher, meetings with Chancellor Helmut Schmidt and future chancellor Helmut Kohl, and a visit to East Berlin via Checkpoint Charlie. In July 1979, the Reagans made an overnight trip to Mexico City to meet President López Portillo.
Through his Citizens for the Republic, Reagan assured himself a prominent role in the 1978 midterm elections. But, unlike 1976, when he had restricted his support to conservative Republicans, this time, Nofziger said,
“[we] became more interested in making friends and picking up brownie points for Reagan than in helping elect a select few. . . . We wanted broad party support for Reagan come 1980. So we contributed about $800,000
to campaigns that year and bought a lot of friends for him. What we sought was enough political support to create an impression of inevitability about a Reagan candidacy.”45 Among the more moderate Republicans Reagan hit the stump for was Senator Charles Percy of Illinois, who publicly credited him with his razor-thin win.
Nancy also worked to further the cause. “I remember the night they had the Nixons up from San Clemente to ask him for his help,” a close friend told me. According to Nancy’s records, she gave a dinner in August 1978 for the Nixons
and
the Annenbergs, with the Gosdens and the Deutsches as the only other guests. She served pea soup, fried chicken, and coconut mousse. Ronnie brought out a Haut Brion ’47 for the former president and his ambassador to London.46 Keeping the Annenbergs happy was more important than ever, since Gerald Ford had recently become a resident of Palm Springs—where he and Betty would grow closer to Walter and Lee—and was considered the only Republican who could spoil Reagan’s plans by seeking a rematch with Jimmy Carter. Despite Reagan’s loyalty during Watergate, Nixon’s allegiance would also come into question if the man who pardoned him ran. Asked about his plans by a reporter a few weeks earlier, Ford had declined to answer, but he pointed out that since leaving the White House he had traveled more than 400,000
miles on behalf of the Republican Party and some “deserving charities.”47
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Ronnie and Nancy: Their Path to the White House
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As 1979 began, Reagan was far ahead of a crowded field of potential contenders for the GOP crown. In a Gallup Poll released on January 10, he was the favorite of 40 percent of Republicans, followed by Ford with 24 percent, Senate Minority Leader Howard Baker of Tennessee with 9 percent, and former Texas governor John Connally with 6 percent.48 Lagging behind were two Illinois congressmen, John Anderson, a liberal, and Philip Crane, a conservative. As winter turned into spring, two more big names were added to the list: Senator Robert Dole and former CIA director George Bush, but Reagan remained the clear front-runner. One major worry, however, was that Jack Kemp, the forty-four-year-old champion of the supply-side movement, would listen to the clamoring of
Wall Street Journal
editorial writer Jude Wanniski, neoconservative intellectual Irving Kristol, and Jeff Bell, whom Reagan had declined to support in New Jersey only a few months earlier, and throw his Buffalo Bills helmet into the ring.
On March 7, in Washington, Paul Laxalt announced the formation of Reagan’s exploratory committee, with himself as chairman and John Sears as executive vice chairman and chief strategist.49 “Sears was firmly in control,” a let-down Nofziger wrote. “He named Jim Lake press secretary and put his other crony, Charlie Black, in charge of the field operation. Both were well qualified. Deaver, as usual, was the majordomo, taking care of the Reagans, worrying about logistics, and serving as the deputy campaign manager and general manipulator of people and things. Ed Meese was the overall issues man while Marty Anderson was again in charge of domestic issues and Richard Allen headed up foreign affairs. . . . As for me, Sears, in another stroke of genius, decided that I should be the fund-raiser, the one position where he was confident I would fail.”50
Nofziger had done everything he could to prevent Sears’s return, including traveling to Houston in the spring of 1978 to persuade James Baker to join the Reagan team. Baker said he had already made a commitment to support his good friend George Bush if he decided to run.51
Meanwhile Mike Deaver, with Nancy’s approval, had sent out feelers to Sears about taking an advisory role in the campaign. When Sears hinted that he might go to work for Senator Howard Baker unless he was put in charge, Deaver, who had been angling to run the campaign himself, caved in. Nancy invited Sears to Rancho del Cielo, where the wily Washington lawyer convinced Reagan that he couldn’t win with any other campaign
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manager.52 Nofziger told me that Reagan’s decision was all the more dis-heartening because “he had made a commitment that he would not bring Sears back in.”53
Deaver later explained, “It was at my insistence that John Sears was brought back to head the 1980 primary campaign, over the objections of Paul Laxalt and other Reagan intimates. I still believed that we needed the Eastern access that Sears could provide. I had a healthy respect for his tactical skills, and his calm, almost laid-back manner. A cherubic-looking guy, Sears was no ideologue. He was . . . a brain for hire who wanted to play on a winning team. And those were terms I understood.”54
In announcing Reagan’s campaign committee, Sears played up the presence of four of Ford’s cabinet members, including Bill Simon and Caspar Weinberger, who had been secretary of health, education, and welfare.