Posted on 10/22/2003 7:07:15 AM PDT by harpu
Remember "voodoo economics"? The phrase comes from the first President Bush. During the 1980 Republican presidential primaries, the current president's father famously denounced Ronald Reagan's supply-side economics as "voodoo economics."
What seemed like exotic hocus-pocus to the elder George Bush was the idea that if you cut taxes, people might work more, and hence earn more, which would then result in higher tax revenues. I never understood why Bush thought this was akin to Haitian head-shrinking and black magic.
Regardless, voodoo economics became known as "Reaganomics" once the Gipper was elected and the terrible 1980-1982 recession kicked in. Today it's difficult to exaggerate how vicious the press and the Democratic Party were in their attacks on Reaganomics.
And then the economy launched like a rocket. When the government announced that the economy was growing at a 5 percent growth rate, Reagan declared, "It's funny, but they don't seem to call it Reaganomics anymore."
Reagan, alas, was wrong. Instead, Reaganomics got redefined. In the early '80s, it may have been synonymous with economic failure. Later, in the face of a roaring economy in the mid and late '80s, Reaganomics came to mean greed, materialism and indifference to the poor and downtrodden. The press became fixated on income inequality, "junk bonds" and the "go-go" culture of Wall Street.
Fast-forward to the 1990s. According to almost every measure, the Clinton economy was "worse" than the Reagan economy, if you go by these standards. Income inequality increased. More junk bonds were sold in 1993 alone than from 1982 to 1986 (when Mike Milken was the "Junk Bond King"). And don't even get me started about the go-go Wall Street culture created on Clinton's watch - a culture that brought us all of the accounting scandals, Enron, day-trading, etc., which have been unfairly laid at the feet of the Bush administration.
And yet, we're told Bill Clinton's economic success was the greatest accomplishment of the Democratic Party since FDR. As my friend and colleague Rich Lowry notes in his outstanding new book, "Legacy: Paying the Price for the Clinton Years," this is all nonsense on stilts.
Clinton started talk of his economic legacy, notes Lowry, by declaring over and over again, that the historically mild 1990-91 recession constituted "the worst economy in 50 years." And that he - and he alone - had to "rebuild" the entire $11 trillion U.S. economy. Never mind that the recession actually ended in March 1991, seven months before Clinton had even announced his candidacy.
I don't think Bill Clinton deserves any credit for creating the 1990s boom. The idea that Clinton's teensy-weensy economic plan - "Putting People First" - launched the high-tech boom of the 1990s is laughable. As were the predictions from Newt Gingrich and others that Clinton's plan would "destroy" the U.S. economy.
Clinton probably does deserve a reasonable amount of credit for not derailing the boom. And I do think Ronald Reagan deserves a bit more credit for the good 1980s economy, in part for the historically radical changes in tax policy, but mostly for his decision to fire those striking air traffic controllers, which sent a major signal that "Eurosclerosis" wasn't going to happen here.
But that's where I get off the reservation.
Presidents like to claim they "create jobs." Well they do - a few thousand of them, mostly around Washington, D.C. But they don't create millions of jobs in the private sector, at least not with any precision or in a way that can be replicated by flipping some job-creation switch. Even the New Deal was largely ineffective until the onset of WWII. What creates economic growth are billions of decisions all over the world, made according to a timeline that only vaguely coincides with the political calendar.
It now looks like the economy's about to take off again. President Bush will surely claim more credit than he deserves. President Bush's tax cuts were in, my book, a good idea. But they surely didn't restructure the U.S. economy.
All of this is the real "voodoo" economics. And by all of this, I mean the nonsense spewed by Democrats and Republicans alike about the economy. Not only does this voodoo economics ascribe powers to presidents they don't have, but it allows the personality of the president to color the morality of material progress. When President Reagan was in office, wealth creation was evil. When Clinton was in office, it was good.
In other words, the voodoo trumps reason. It's all hocus-pocus and mumbo-jumbo. Howard Dean even believes that a massive tax hike would create jobs simply because that would be the Clintonesque thing to do. "I would go back to the Clinton era of taxes," Dean told NBC's Tim Russert, "because I think most Americans would gladly pay the same taxes they paid when Bill Clinton was president if they could only have the same economy that they had when Bill Clinton was president."
Why not just say he's got a recession doll and he's going to stick pins in it?
He actually did bring it to a screeching halt (One should simply remember how the phones went silent when he gave his 1993 Health-Care speech). It took until 1996 for the economy to get going again. What happened in the mean-time? A Republican Congress was elected that stopped most of his stupidity and gave confidence to businesses.
Well I wouldn't Mr. Dean, and that is why you will never be President
No, but there's more than meets the eye.
The President of the United States, through his rhetoric on taxes and regulation, can profoundly influence business in ways that don't involve structural changes. Business knows when it is public enemy number one, and this fact will always tend to influence investment, capital formation, and other behaviors essential to economic growth.
Business felt that way when Clinton was President, and the way they dealt with it was to attempt to 'buy' favorable legislation through donations to Clinton's party, and by illegal accounting scams which sprang directly from the anti-capitalist climate which prevailed in those years. Those businesses that didn't succumb to either went about things in a very cautious way, which is never good for the economy.
It is my contention that business feels much more confident in President Bush's economic policies, and THAT as much as anything explains the current uptick.
HA!!
Does that about sum up the Liberal-Socialist quisling mediot's modus operandi to a 'T' or what?
"Reagan, alas, was wrong. Instead, Reaganomics got redefined. In the early '80s, it may have been synonymous with economic failure. Later, in the face of a roaring economy in the mid and late '80s, Reaganomics came to mean greed, materialism and indifference to the poor and downtrodden. The press became fixated on income inequality, "junk bonds" and the "go-go" culture of Wall Street."
HA!!
Then Glodberg does it again!
Great stuff.
"Fast-forward to the 1990s. According to almost every measure, the Clinton economy was "worse" than the Reagan economy, if you go by these standards. Income inequality increased. More junk bonds were sold in 1993 alone than from 1982 to 1986 (when Mike Milken was the "Junk Bond King"). And don't even get me started about the go-go Wall Street culture created on Clinton's watch - a culture that brought us all of the accounting scandals, Enron, day-trading, etc., which have been unfairly laid at the feet of the Bush administration."
Don't forget about the dotcom debacle, jonah.
Who were & how many people who'd invested in the bucket of sand boondoggle lost everything they had which was going on all the while & through the entire Clinoccio administration's run; and, surprise of surprises not once are the Liberal-Socialists on record sounding the clarion call that the "Big Scam" was on, either.
Gawd-awful short memories, sultan.
...*that's* the Liberal-Socialist's real weapon.
Just listen to the news, it's deja vu all over again.
(Thanks Yogi!)
Repeat loudly and often.
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