Thirty Years of Progress--Mostly

Leaving the helm of The Wall Street Journal, I'm optimistic about America's future.

Since I'm shortly to become editor emeritus of The Wall Street Journal, this juncture is a time for reflection on the 30 years I've been running these editorial pages. These reflections bring a perspective to the times we're living through. Certainly these are troubled times. For the Journal, the terrorist conflict has been up close and nasty. We had nearly 3,000 people killed across the street from our headquarters, and were scattered in temporary locations for a year after. We were proud of putting out a newspaper, a magnificent one, on Sept. 12, 2001, and lucky that none of our colleagues died. But many of us did lose friends, and one of our reporters was kidnapped and brutally killed by terrorists in Pakistan. And terrorism is only the most prominent of a litany of troubles involving war, civil liberties, recession and a sagging stock market.

It is very rare that I enjoy a retrospective piece. This one is GREAT. Thanks for posting it. I can add one thing to his writing: ... also believes that the '82 recession resulted from a timing mismatch. Tight money came so much earlier than tax cuts; if they had come simultaneously the recession might have been avoided.

The tax cut of RR was brilliant, and well thought out, as was the whole of President Reagan's economic policy. All of those who engineered it must be commended, possibly for actually saving our country, and possibly the economy of the whole world. It is not an exaggeration to say that we really were on the edge of the abyss then. A continuation of what was happening would have surely devolved into Depression with a capital D at least, and who knows what else. The one thing that nagged at me then, and still does, is the compromises that had to be made with the House Demodogs to achieve passage of the Bill.

The first of these was to change it from a 30% cut that year to a phased-in 5%-10%-10% schedule. That certainly hurt the economy, as Mr.Bartley says, by a timing mismatch. It also provoked a distorted reaction by entrepreneurs who waited until they could get benefits of the whole cut. Once again, Reagan and his advisors were right, and repeatedly made the case for not doing phasing-in, but the Demodogs were obstructionists (as they were in opposing the spending cuts RR proposed that would have balanced the budget by '87).

The second compromise that had to be made to achieve passage was the very short-sighted change in the long term capital gains rules. That change provoked the Savings and Loan crisis as loans which were "good" to make under the old rules suddenly became "bad" with the new tax rules. For this, I again blame the Demodogs for their penchant to do everything they can to hurt business, but I also believe that RR and advisors ought to have fought harder about it. It seems to me they were hoping to get that onerous problem removed in subsequent legislation, but that was not to be, and it cost us hundreds of billions of dollars as a result.

Again, what a well written retrospective, and Congratulations and Thanks to Mr.Bartley for his service.

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