The New York Times > Opinion > Krugman: An Economic Legend: "In the late 1970's most economists believed that eliminating the high inflation then prevailing in the United States would require inflicting a lot of pain: the economy would have to go through an extended period of high unemployment and depressed output. Once the inflation had been wrung out of the system, the unemployment rate could go back down. And that's exactly what happened. In fact, it's instructive to put a graph showing the actual track of unemployment and inflation during the 1980's next to a figure from a 1978-vintage textbook showing a hypothetical disinflation scenario; the two look almost identical.
Ronald Reagan didn't decide to inflict that pain. The architect of America's great disinflation was Paul Volcker, the Fed chairman. In fact, Mr. Volcker began the process in 1979, when he adopted the tight monetary policy that caused that record unemployment rate. He was also mainly responsible for the recovery that followed: it was his decision to loosen up on the money supply in the summer of 1982 that set the stage for the rebound a few months later.
There was, in short, nothing magical about the Reagan economy. The United States did, eventually, experience an economic miracle — but not until Bill Clinton's second term. Only then did the economy achieve a combination of rapid growth, low unemployment and quiescent inflation that confounded the conventional economic wisdom. (I'm aware, by the way, that this plain statement of fact will generate an avalanche of angry mail. Irrational Clinton hatred remains a powerful force in American life.)
It's a measure of how desperate the faithful are to believe in the Reagan legend that one often reads conservative commentators claiming that the Clinton-era miracle was the result of Mr. Reagan's policies, and indeed vindicated them. Think about it: Mr. Reagan passed his big tax cut right at the beginning of his presidency, and mainly raised taxes thereafter. So we're supposed to believe that a tax cut passed in 1981 was somehow responsible for an economic miracle that didn't materialize until around 1997. Apply the same timing to the good things that happened on Mr. Reagan's watch, and you'll discover that Lyndon Johnson deserves the credit for 'Morning in America.'
Emphases mine. "Faithful" is the right word, Reaganism has many of the features of a cult.
Yesterday I wrote about Reagan as Chaunce the Gardener; enabling Gorbachev was a real acheivement, albeit completely alien to the ways of the Reagan faithful. Reagan also somewhat simplified the tax code, though his successors destroyed those simplifications (I think that was pure Reagan and reflected well upon him.) Deregulation was important in America, and I think that had far reaching consequences both good and bad. (Perhaps, despite Krugman's words, even in the 1990s.)
But Reagan was no deity. It's too early to tell if he was even an above average president. Clinton may end up ahead a hundred years from now -- if the entities of that future care to study our entrails.
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