It is hard to remember what America was like 25 years ago. It was 1979, and at 68, Ronald Reagan was launching his third campaign for the presidency. Around the world, America was in retreat. Iranians had American diplomats as hostages. Soviet troops had moved into Afghanistan. The American economy was in desperate trouble.

American exceptionalism—the idea that this country is special and specially good—seemed dead. That conclusion was reinforced by the failures of Vietnam and Watergate, and by the assassination of John F. Kennedy. Previous great presidents, Abraham Lincoln and Franklin Roosevelt, had led their country through terrible wars and then, visibly aged, had fallen at the moment of victory. But Kennedy, still seeming young and vigorous, was struck down when his work was far from done. America, it seemed, was no longer specially blessed.

Ronald Reagan would have none of it. Like Franklin Roosevelt, for whom he voted four times, Reagan was an American exceptionalist through and through. America was, for him, as for John Winthrop, "a city on a hill," a nation with a special mission to show the way toward liberty and human rights. The "evil empire" of the Soviet Union, Regan predicted, would soon be consigned to the "ash heap of human history." Through his aggressive defense buildup and his missile-defense program, Regan pushed the Soviet Union toward collapse. His America was not just one of many countries, with a system more or less as good as any other; it was a nation that stood for the right ideas, a nation was strong enough and confident enough to make those ideas prevail through most of the world.

Strong and confident: which America wasn't in 1979. When the hostages were seized in Iran—an act of war against the United States—practically no one in public life echoed Daniel Patrick Moynihan's call to "bring fire and brimstone to the gates of Tehran." Around the country people tied yellow ribbons around trees, to show the hostages we yearned for their return: Americans were victims, not doers. Reagan changed that, too. In December 1980, as president-elect, he called the hostage-takers "criminals" and "thugs;" the hostages were released the moment he became president. In the Oval Office, Reagan built up the military and showed the willingness to use force and to stop Soviet adventurism in Nicaragua and Afghanistan.

Reagan was not a fatalist who believed that America had to let bad things happen in the world, nor was he a fatalist about the American economy. Lower taxes and a hard dollar would, he believed, produce economic growth with low inflation. Through two years of painful recession and low job approval ratings, Regan stayed that course, and was proven right. Few if any experts in 1979 predicted that the United States was headed to nearly a quarter-century of low-inflation growth and that our economy would surge ahead of Europe's and Japan's. Reagan did more than anyone else to enable it to happen.

When Reagan started running for president in 1979, it was generally believed that history moved left, resulting in an ever-larger government. Reagan and his friend Margaret Thatcher in Britain showed that history could move in another direction. The free-market economics Reagan had learned at Eureka College has prevailed, even in the academy, over the Keynesian economics long taught at Harvard and MIT.

Forgotten is the pessmism and fatalism of the late 1970s.

It is impossible to imagine America and the world taking the course they have over the last quarter-century had Ronald Reagan not been president. Derided by Washington insiders as an amiable dunce, Regan was in fact a closet intellectual, a voracious reader, graceful writer and original thinker. Outwardly cheerful and friendly, he was as inaccessible and inscrutable to his closest aides as Franklin Roosevelt was to his: steel beneath the smile. This man who graduated from college in the rock-bottom depression year of 1932 radiated the same optimism as the man elected president that year. In the first half of the 20th century, FDR rescued America from despair and the world from totalitarianism; Ronald Reagan did the same in the second half.