I only recently came across the following diagram, so apologies if its been discussed before.
http://www.nytimes.com/interactive/2009/01/26/business/economy/20090126-recessions-graphic.html
If the Keynesian prescription for recessions is to cut taxes and increase spending, then by that definition Reagan was a Keynesian. And his policies worked. Yet Austrians argue that Keynesianism has never worked. But it did work for Reagan, didn't it?
The New York Times is an interventionist newspaper. Do not be surprised that it produced interventionist articles and opinions.
The early 1980s recession was caused by high interest rates meant to stop inflation. Much spending in the 1960s and 1970s was paid for with newly printed money which meant rising prices. This became so bad that Federal Reserve Chairman Volcker hiked interest rates to stop the inflation. Once prices adjusted enough the economy improved, but the economy still suffered from government intervention in the form of the Savings & Loan Crisis.
There is no such thing as Reaganomics.
It was a mixture of Volckerite monetarism in early years, then a much looser heterodox monetarism for a brief while, then Arthur Laffer/Paul Craig Roberts style supply side economics, then neoclassical Keynesianism synthesis, and then some regressions to the prior four in different periods.
Reagan, stuck in Alzheimer dementia and speaking the words put in his mouth by Alexander Haig and others, was not so learned in economics that he had any idea that he was being fed entirely contradictory ideas from differing schools of thought. Reagan started life as a New Dealer and then changed his positions to suit his newfound Republican friends. Briefly, he may have been enthusiastic about economics in the 1960s, but by the time he went crazy, I doubt he remembered any of the economics he learnt.
I bet to you guys that Gerald Ford and Nelson Rockefeller knew more economics than he.
The story has it that reagan instituted a "pro-growth" tax system. Ideologically he is a supply sider. Which means less government , lower taxes, "stable currency"-ha and above all, the conviction that production leads to growth. Keynesianism, advocates deficit spending, stimulus in recession and a focus on consumption as the general thoery so poorly implies.
In my humble opinion "Reagonomics," ie, fascism, is what happens when conservative right wing statists which identify with classical economics get in control of the state. (Hey, as you can see, left wing statists can be just as bad)
Even Mises basically said fascism was necessary to save europe from communism.
In States a fresh law is looked upon as a remedy for evil. Instead of themselves altering what is bad, people begin by demanding a law to alter it. ... In short, a law everywhere and for everything!
~Peter Kropotkin
In my humble opinion "Reagonomics," ie, fascism
Whadya mean by fascism? That's a strange equation.
I agree, however, keynesianism and "reaganomics"- essentially supply siders, isnt it all fascism ie, "strength through unity"?- Haha.
This is your worst moment, Laotzu.
Specifically, in relation to the recession, Reagan cut taxes and increased spending. Isn't that Keynesian?
In my humble opinion "Reagonomics," ie, fascism,
lol
"If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion."
We shouldn't even reveal to him how Mussolini's industrial policy actually worked.
I would say that Reganomics is a type of Chicagoian neoclassical economics... I think Reaganomics is exactly the type of econ that most Chicagoians call for when they talk about government's role in the economy. The main economist that contributed to reganomics was William Niskanen... I think it is the current economic policy that most tea partyers agree to as well, ( cut spend except for military spending!) Yes Keynesians call for reduction of taxes during a recession, but I think Reganomics call for a reduction of taxes in general, whether it is during a recession or a period of economic growth. Keynesians also call for more government spending during times of recession but Reaganomics calls for less spending..
As Niskanen points out, Reaganomics was put in place to
1, reduce government spending 2, reduce marginal tax rates on income 3, reduce regulation 4, reduce inflation by controling the money supply..
The first point might be misleading because while they said they wanted to cut govrnment spending, they really meant cut spending except for military spending. Nevertheless, the overall spending of government would be less.
the second point and third point were put in place because Reagan did want the economy to grow through private sectors more than public.
the fourth point is the point that was a very Chicagoian influence... As Friedman claimed, the reason why the great recession occured was because the Fed failed to regulate the money supply to control inflation...
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Production is 'anarchistic' - Ludwig von Mises
while I disagree with the whole Reaganomics = fascism, I can see why Laotzu del Zinn might think so because Reaganomics was big on expressing the role on the military. Remember, in the 80s, America was all about the war against communism.
Mussollini called fascism the merger of the corporation and the state. I am using that broad definition here. Perhaps I should have said "ie, american fascism," or corporatism/corporatocracy.
Besides Reagan's heavy merging of corporation and state, his regime was very anti-expression, pro military, and imperialistic. It relied on conservative values and the suppression of minorities.
It's different than Italian and German fascism, sure. But it's fascism none-the-less. You can leave all your leftover republican bias for Reagen, the murderer, at the door.
bit of background: http://mises.org/daily/1544 by Rothbard on Reaganomics.
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It's easy to refute an argument if you first misrepresent it. William Keizer