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Leadership lessons from the Reagan years - page 10 / 17





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Ronald Wilson Reagan Case Study


Restaurateur hails '80s economic turnaround

Reagan persuaded Congress to lower income tax rates by 25% and later to pass a tax-reform plan that cut rates further and streamlined the tax code. He also backed a series of tax increases.

When Ronald Reagan became president, Carl Carreca was a General Electric engineer dreaming of being a restaurant owner.

their business in 1988 at the end of Reagan's second term.

Carreca, 68, credits many of Reagan's foreign and domestic policies for helping spur his family's success. On Reagan's watch, interest rates fell to single digits, making business loans more affordable.

But double-digit interest rates stymied Carreca's plans to borrow $300,000 to buy a Pizza Hut franchise. "Devastating," he says of rates in the early 1980s. "I couldn't do it."

Carreca concedes that he could have plowed ahead and borrowed at sky- high rates. But the higher cost would have hamstrung growth during the critical early years. "I would have been worried about profitability," he says.

The Cold War's end meant the federal government could shift more money to other programs. That bolstered the U.S. economy and Carreca's restaurant growth, he says.

Slow times were the reason Carreca chose the business. Even in recessions, he says, "people still have to eat."

But perhaps just as important, he says, was Reagan's sunny outlook. That inspired Carreca and countless other would-be entrepreneurs to start businesses when the economy was still recovering from the 1981-82 recession.

Carreca and his family now own 12 Pizza Huts in Tennessee and Kentucky with about 400 employees and $10 million in annual sales. They started

Income tax rates also dropped, helping him save $100,000 in start-up money to buy the first restaurant in Clarksville, Tenn.

Carreca recalls Reagan's message: "You can do anything that you want to do this is a great, free society."

By Jim Hopkins

AIDS activist points to consequences of years of inaction

In 1981, only 199 cases of AIDS had been reported in the USA. By the time Reagan left office in 1989, more than 46,000 Americans had died. Reagan did not deliver his first major speech on the disease until 1987.

SAN FRANCISCO In the early 1980s, a terrifying and little- understood disease called AIDS was killing scores of gay men. Public health officials here and in other cities urged the federal government to take the lead in battling it.

But Ronald Reagan was silent. Not until late in his second term did he even mention AIDS publicly. As president, he could have ordered federal money and research into the battle to stop the disease. He could have asked Congress for emergency funding. His inaction remains a source of resentment among AIDS activists.

"This was an enormously popular president with enormous political power throughout the country," says Rene Durazzo, a project manager for the San Francisco AIDS Foundation. "And he set the tone. Unfortunately, it was a tone that cost hundreds of thousands of lives."

By 1985, researchers knew that AIDS was an immune disorder caused by a virus, that it was spread through sexual contact and that infection rates were soaring. A test had been developed to detect HIV, the virus that causes AIDS. Still Reagan was silent.

Durazzo, 53, a San Francisco native, was the foundation's public policy director in the late 1980s. He recalls the fear and hysteria in the early years of AIDS. "There was enormous homophobia and stigma around this disease that the administration did

not want to hear," he says. "It did not want to appear at all sympathetic to an illness and a horror that was happening to gay people primarily."

When the government finally took action in 1987, it was ineffective, he says. Public-service messages carried no explicit information about how AIDS spread or that gay men were susceptible.

"It was really too late at that point," Durazzo says. "The epidemic had already turned the corner and had escalated. By then it was going to be very difficult to contain it."

By John Ritter

Reprinted with permission. All rights reserved.

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