Yesterday, I Posted on my substack long interview That’s what my late Hoover Institution colleague Martin Anderson said about his time with Nixon. In it, he reveals how Nixon quickly reached Marty’s anti-draft position, relatively soon after meeting with Marty in 1967.
There are many other interesting things in this interview. Marty talks in detail about Ronald Reagan, who was very different from Nixon. Here’s something about Reagan’s intelligence and knowledge.
I once described him as warm and ruthless. He seemed friendly, cheerful, and kind, and never argued or complained to anyone. But if you shake your head and think about it for a moment, he always did it his way. It was as if there was an iron rod in his middle, and everything you touched was soft and fluffy, except for the iron rod in the middle. He always did it his way. No matter how many people talked to him, no matter what happened, he always acted his way. If you get in the way, you’re gone and you’re fired. He never looked forward to it and just left.
If you really want to know about Reagan, I think one of the things we show in this new book is what I learned from my involvement with him. He was incredibly smart. It may not sound rational, but he was incredibly smart. I’ve dealt with professors at Columbia University and professors at Stanford University who have the ability to see something, understand it, grasp it, orient it, manipulate it, play with it. is completed. He was incredibly fast. I think he had a brain comparable to Milton Friedman, Ed Teller, Arthur (Burns) and others. I was able to be with them.
Well, he hid it. He just stepped back. He never argued with the staff. You can tell 10 different people the same thing and he just listens. He would never tell them, “Look, you idiot, I wrote a long article about this 10 years ago.” He would just say, “That’s an interesting idea.” Over time, he listened to so many policy issues that were put forward to him by different people, and it was very interesting. And when he did it, everyone was overjoyed, even though it was something he had decided to do years in advance. He was doing what they told him to do. He was happy with it, didn’t care.
He often said privately, “If you don’t care who gets the credit, there are no limits to what you can accomplish.” And he was very smart. The second thing was that he had a feeling that he was being lazy, that he was taking a nap. Well, I traveled with him for almost four years. He never took a nap. That was complete nonsense. In fact, he worked all the time. In this book, we uncover evidence such as handwritten documents that he continued to write throughout his life. He was studying, writing, and working all the time in his private life. As soon as he appeared in public and assumed a public persona, he began to be friendly and cheerful.
For some reason, I found myself thinking about Reagan today. I never voted for him. I couldn’t vote until 1986, shortly after I became a U.S. citizen.
I enjoyed working for Martin Feldstein for two years when he was Chairman of the Council of Economic Advisers and I was a senior economist, but Marty (Mr. Feldstein, not Anderson) was a Republican. I thought he was one of the many intellectuals who sold short. The story here is relevant.
Marty and I were working with people from the Office of Management and Budget, the U.S. Department of the Treasury, the Department of Health and Human Services, and the White House policy department on a proposal for employers to contribute to employee health insurance. Taxable income of approximately $1,500 or more per year. That may not seem like a lot, but $1,500 in 1983 would be more than $4,700 today, adjusted for inflation. The idea, shared by many health economists and many other economists, was that employers and employees faced appropriate marginal incentives that would bias health insurance over taxable wages and salaries. The idea was to ensure that little or no occurrence occurred. ($1,500 per year is below the median employer contribution, and if $1,500 were not indexed to inflation, the bias would become smaller and smaller over time.) But Marty goes further. , argued that employers should be able to deduct out-of-pocket costs. If an employee’s health insurance contributions are taxable, the employee must purchase insurance with a coinsurance rate of at least 10% and a minimum deductible. (I forget the deductible amount.) I got into an argument with him. I said that these no-requirement proposals give the employer the right incentive and are somehow saying that you know better than the employer. Although he could not have a proper discussion, he insisted that I accurately represent his position at interagency meetings. I did that. When Marty tried to say what he thought and I didn’t say it, I said, “The Chairman believes that…”
Interestingly, health economists from all over the country got wind of Marty’s argument and wrote to me to try to persuade him to stop doing it. (In the late 1960s and early 1970s, before he started working on other issues like Social Security and corporate taxes, Marty was probably the world’s leading health economist.) So I went to Marty and said, He said something like: Mr. Newhouse said hello and asked me to tell him that he thought it was a bad idea for employers to dictate the terms of health insurance. Marty would approve of the “hello” part. In response to a third letter from a health economist, Marty said: “Okay, David, okay. Cut it out.” So I did.
Anyway, back to the story. There was a meeting of the Cabinet Council, where Marty presented his proposal. In normal flow, he would have brought me and I would have been one of the people in the photo sitting with my back to the wall instead of the table. He did not invite me, and I found out about the meeting only after it was over. I heard from a colleague at another White House store that his boss had invited him to a meeting.
I think Marty understood me. I was the type of person who immediately spoke up when I had a disagreement. The idea that President Reagan and a bunch of Cabinet members were there didn’t scare me at all. So I think Marty was, to some degree, understandably afraid of me speaking up. If I had known about this meeting beforehand and knew Marty wasn’t going to take me there, I would have said, “Okay, okay.” You can say the earth is flat, but I won’t say anything. “I have no choice.
Since the story keeps going off track, I’ll now talk about the part about Marty and Reagan. After the meeting, I heard from a colleague at another White House store, so I went up to Marty and asked him how it went. He said, “It worked, and the president understood.” Still, having followed Reagan’s thinking for about six or seven years, I think Marty Feldstein underestimated Ronald Reagan. I thought there was.
