Lessons from Reagan by Tom Reynolds
A month ago, Mikhail Gorbachev died and the main stream media couldn’t say enough about how he was responsible for the dissolution of the Union of Soviet Socialist Republics (USSR) – as if it was his idea. The reality is that he did everything he could to preserve the USSR until the “Evil Empire’s” death was unstoppable. The main person responsible for destroying the USSR was Ronald Reagan, with help from Lech Walesa, Margaret Thatcher and Pope John Paul II. If Gorbachev was in any way responsible it was by his incompetence, as Reagan ate-his-lunch.
When Reagan took office in January 1981, the general philosophy amongst the U.S. leadership was that we had to coexist with the USSR. In January 1992, the USSR no longer existed.
How did Reagan do it? Any lessons to be learned from Reagan?
When Reagan said the Soviet Union was destined for the “Ash heap of history”, it wasn’t just rhetoric. He understood the precarious position that the USSR was in, especially economically.
Anyone ever buy a Russian refrigerator, a Russian car or a Russian TV? Not likely. The USSR’s main source of hard cash to fund its expansionist empire was from its exports of fossil fuels: oil and natural gas. The USSR’s economy desperately depended on cash from those exports.
Reagan worked to flood the market with oil: he accelerated the removal of U.S. price controls; lowered the windfall profits tax; and trumpeted that Capitalism was a good thing. In addition, the trans-Alaska pipeline came on-line and North Sea oil production increased.
What happens when there is an excess of any product? The price drops. And to the Soviet Union’s distress, Reagan engineered a glut of oil and its price dropped, dramatically. In 1986, oil sold for 26% of its 1980 price per barrel. Basically, Reagan bankrupted the USSR by letting supply-and-demand do the work for him.
Fast forward to 2022. The Russian Federation is the successor to the USSR but very little has changed from the USSR’s good-old-days; oil and natural gas are still Russia’s main source of cash from exports. No one is yet buying Russian refrigerators, cars or TV’s.
Europe, in particular, due to some of the dumbest political leadership in history, has made itself dependent on Russia for natural gas and oil. Then, earlier in the year, the European Union said it planned to phase out imports of Russian oil, aiming to cut their purchases by 90% by the end of the year. Is the E.U. leadership aware of the weather phenomenon called Winter?
Current President Joe Biden was a Senator in the 1980’s and did everything he could to oppose Reagan. He hasn’t learned anything, especially about supply-and-demand. Or maybe he has issued an executive order to outlaw it.
Biden was determined to destroy the fossil fuel industry in the U.S. and when Russia invaded Ukraine, Biden was the prime mover in imposing an embargo on Russian exports of oil and natural gas. Net result - an oil and natural gas shortage - and the law of supply-and-demand took over; oil and natural gas prices soared, worldwide. When Biden became president, the average price of a barrel of oil was about $54. It’s now about $84 (a 55% increase) and earlier in the year was about $120. Russian oil revenue averaged $15 billion a month in 2021 and was averaging $20 billion in the first half of 2022. The embargo reduced Russia’s exports but not it's income.
As a by-product of all this, gasoline prices in the United States dropped during Reagan’s administration. According to the U.S. Bureau of Labor Statistics, the average price of a gallon of gas in 1980 was $1.25. In Reagan’s last year in office, 1988, it was $.95.
Contrast this with Biden’s strategy where, in 2020, gasoline sold for $2.17 per gallon. In 2021 it was $3.05. In 2022…you know what it is and had been a few months ago and is predicted to be again.
Russia’s invasion of Ukraine may yet fail. But it won’t be because of an oil embargo against Russia. The people the embargo has hurt are…look in the mirror.
How would the world be different if Biden had followed Reagan’s plan and reversed his opposition to fossil fuels and flooded the market? Would Russia’s Ukrainian invasion already have flopped, saving the U.S. taxpayers hundreds of billions in support of Ukraine? How many Ukrainians and Russians would still be alive? And what would a gallon of gas cost?
There’s another lesson from Reagan that the current political leadership at the federal and New York State level hasn’t learned.
From the 1950’s and on, both the USSR and the U.S. had enough nuclear weapons to destroy the other. But they did not do it because of a policy called Mutually Assured Destruction. If the USSR had attacked us, they knew we would retaliate and destroy them. Even if the USSR succeeded in destroying the U.S., they would also have been destroyed. Or as President Eisenhower put it, “We’ll all be grubbing for worms”. In a world where our adversaries were not going to disarm themselves, Mutually Assured Destruction worked.
Why do mass murderers attack Gun Free Zones and not places where their victims might fight back. The murderer may succeed in killing someone but, if the victims are armed, it’s likely the murderer will also be killed. On a smaller scale, it’s Mutually Assured Destruction. And since criminals are not likely to unilaterally disarm, the ability to shoot back is the key to survival when a murderer is at hand - or to prevent that situation from happening.
Would a murderer plan to face an AR15 locked and loaded with 15-20 rounds of ammo. Not a concern for murderers in Joe Biden and Chuck Schumer’s vision of America where the AR 15 is outlawed.
Would a murderer plan to face a potential victim who may be concealed carrying? Not a concern for murderers in Kathy Hochul’s New York State where U.S. Supreme Court decisions are ignored in favor of declaring the entire state a gun free zone.
