Skip to comments.Reagan Was a Keynesian (Paul Krugman revises history again)
Posted on 06/08/2012 4:25:21 AM PDT by SeekAndFind
Theres no question that Americas recovery from the financial crisis has been disappointing. In fact, Ive been arguing that the era since 2007 is best viewed as a depression, an extended period of economic weakness and high unemployment that, like the Great Depression of the 1930s, persists despite episodes during which the economy grows. And Republicans are, of course, trying with considerable success to turn this dismal state of affairs to their political advantage.
They love, in particular, to contrast President Obamas record with that of Ronald Reagan, who, by this point in his presidency, was indeed presiding over a strong economic recovery. You might think that the more relevant comparison is with George W. Bush, who, at this stage of his administration, was unlike Mr. Obama still presiding over a large loss in private-sector jobs. And, as Ill explain shortly, the economic slump Reagan faced was very different from our current depression, and much easier to deal with. Still, the Reagan-Obama comparison is revealing in some ways. So lets look at that comparison, shall we?
For the truth is that on at least one dimension, government spending, there was a large difference between the two presidencies, with total government spending adjusted for inflation and population growth rising much faster under one than under the other. I find it especially instructive to look at spending levels three years into each mans administration that is, in the first quarter of 1984 in Reagans case, and in the first quarter of 2012 in Mr. Obamas compared with four years earlier, which in each case more or less corresponds to the start of an economic crisis. Under one president, real per capita government spending at that point was 14.4 percent higher than four years previously
(Excerpt) Read more at nytimes.com ...
* While there was a brief burst of government spending early in the Obama administration mainly for emergency aid programs like unemployment insurance and food stamps that burst is long past.
* Reagan's Weaponized Keynesianism Reagans big military buildup played some role.
* Real per capita spending at the state and local level, which continued to rise under Reagan but has fallen significantly this time around.
* States and local governments used to benefit from revenue-sharing automatic aid from the federal government, a program that Reagan eventually killed but only after the slump was past.
* In the 1980s, anti-tax dogma hadnt taken effect to the same extent it has today, so state and local governments were much more willing than they are now to cover temporary deficits with temporary tax increases, thereby avoiding sharp spending cuts.
HIS CONCLUSION: If you want to see government responding to economic hard times with the tax and spend policies conservatives always denounce, you should look to the Reagan era not the Obama years.
krugman’s soul is the personal property of satan... when he speaks or writes... brimstone will be evident.
Krugman can never be wrong. When the Obama stimilus package was an abject failue, it only proved that Obama didn’t spend enough.
Krugman: Living proof that figures don’t lie, but liars can figure.
funny how all these extreme left wingers (obama/krugman) try and associate themselves with Ronald Reagan....
Krugman is no Laffer.
But I expect no less than that from Krugman, who is still searching for Gabby Gifford's real shooter, Sarah Palin.
Reagan slashed tax rates and regulation, while taking on the unions. That is what lead to our economic recovery.
Because of this, Reagan ran for reelection on his own record of success, rather than still blaming Carter four years later.
This is nonsense on its face. Reagan received his degree in economics in 1932, in classic Adam Smith economic theory. Keynesianism took hold mid-New Deal and thereafter.
Reagan’s successor, George Bush, got HIS economics degree after coming home from WWII, and was trained in Keynesian theory. That is why he called Reagan’s economics “voodoo economics” because he had never read the classic “invisible hand” theories and didn’t understand them. It also explains why Reagan’s economy was successful and Bush’s was a failure, because he embraced increased spending and taxes as he had been taught. And the result was recession and stagnation, really until the republican house majority cut spending and reduced taxes again.
Krugman is a fool who was given a Nobel Prize to give his idiotic theories some credence.
....I cannot find fault with Reagan after that...
Whether or not Reagan was a Keynesian can be a topic to discuss; what is indisputable is that Krugman is an idiot.
They walk among us
The bailout of Chrysler was under Carter.
Keynesian economics said the simultaneous increase in inflation and unemployment (stagflation) during the Carter years was not possible as it violated the tenants of the Phillips curve. The standard Keynesian remedy of government stimulus applied to the conditions of stagflation created an inflationary spiral giving the double digit inflation of the late 1970s.
The economic events of the time are well documented in a book, The Commanding Heights: The Battle for the World Economy by Daniel Yergin and Joseph Stanislaw. This book was later made into a three part PBS documentary that is currently available for viewing online. Link
Carter and his economic team attained of level of incompetence that was previously thought impossible.
Now Team Obama is once again redefining how bad a president can be.
that's what I get from quoting to my union-supporting father-in-law
You made me laugh out loud!
BTW, I am getting old enough to really understand your tagline. Freepgards.