Is Reaganomics Dead?
In the 1980s, Ronald Reagan said: “The nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help.’”
Four decades later, President Biden says: “Help is on the way.” Is Reaganomics dead? One of President Reagan’s top economic advisors tells us, “Yes, and good riddance.”
Bruce Bartlett, columnist for The New Republic. He was a domestic policy adviser to President Ronald Reagan. Author of nine books, including “Reaganomics: Supply-side Economics in Action” and “The New American Economy: The Failure of Reaganomics and a New Way Forward.” (@BruceBartlett)
Is the sun setting on Reaganomics?
Bruce Bartlett: “It’s hard to say. I mean, as you know, I wrote a book saying that Reaganomics was essentially dying or dead quite some years ago. So in substance, I think Reaganomics has been dying for a long time. But of course, it’s still had very powerful political support that got Donald Trump elected. So it’s taking time for the reality to reach down into the perception of the American people. And it’s quite possible that it is. But it’s too soon to say that the COVID crisis has changed fundamentally the political dynamics in this country. That just remains to be seen.”
Remind us a little bit about what was happening in America in the late 70s that allowed the Reagan administration to institute such major philosophical changes in people’s belief in government.
Bruce Bartlett:“There were two really important things that have been somewhat forgotten. One is inflation. People who were younger than me probably don’t remember it very well. But it was a very, very powerful political force that supported the idea that government was somehow responsible. The deficits were responsible. The government spending was somehow responsible. And so the inflation very powerfully supported a conservative political view, political economic view.
“And second is that inflation interacted with taxes, it caused people to get pushed up into higher tax brackets. When their houses increased in value, their property taxes went up. And this led to a tax revolt, in particularly in California, with something called Proposition 13 in 1978. Which every politician interpreted as meaning we have to cut taxes. So between the inflation and the higher taxes, you had very strong political support for Reagan’s program.”
On Bill Clinton declaring ‘the era of big government is over’
Bruce Bartlett: “[In] his inaugural address in 1996 … he said the era of big government is over. So basically, the idea that Reagan had articulated was internalized. Basically, people in both parties pretty much bought into it. And let’s not forget that Obama put through a large deficit reduction package, as did Bill Clinton. So these ideas are not just Republican ideas. They were accepted by Democrats as well.”
On what’s behind the fall of Reaganomics
Bruce Bartlett: “Part of it, of course, is the gross failure of Trump, who was Reagan on steroids. He showed that if you do every single thing on the right wing wish list, it really doesn’t do very much good. I mean, we cut taxes massively. Did we have a huge spurt in growth? No, we did not. And we saw during his incompetent handling of the COVID virus that we’ve done too much to slash government.
“And I think it’s important that people understand that a lot of what government does is prepare for the worst, and COVID is the perfect example. It’s like a family deciding how much money can we afford to keep for a rainy day. And year after year, you look at that money sitting there and nothing terrible happens and you think, ‘Oh, I guess we’re OK, let’s take a vacation.’ And then all of a sudden, you know, somebody gets sick, you have an accident. Who knows what.
“It’s the same thing with government. You have to build up these institutions, such as the Centers for Disease Control and the National Institutes of Health and things like this to be constantly on the watch for things that you hope will never happen. And then all of a sudden they do. And I think that this is the way you have to articulate a vision of competent, efficient government that we really need.”
From The Reading List
Washington Post: “I helped create the GOP tax myth. Trump is wrong: Tax cuts don’t equal growth.” — “Four decades ago, while working for Rep. Jack Kemp (R-N.Y.), I had a hand in creating the Republican tax myth.”
Washington Post: “Why the GOP should stop invoking Reaganomics” — “In their debates, ads and speeches, the candidates for the Republican presidential nomination are vying for the label of most Reagan-esque.”
The Guardian: “Opinion: Bidenomics beats Reaganomics and I should know – I saw Clintonomics fail” — “A quarter-century ago, I and other members of Bill Clinton’s cabinet urged him to reject the Republican proposal to end welfare. It was too punitive, we said, subjecting poor Americans to deep and abiding poverty.”
New York Times: “2020 Was the Year Reaganism Died” — “Maybe it was the visuals that did it. It’s hard to know what aspects of reality make it into Donald Trump’s ever-shrinking bubble — and I’m happy to say that after Jan. 20 we won’t have to care about what goes on in his not-at-all beautiful mind — but it’s possible that he became aware of how he looked, playing golf as millions of desperate families lost their unemployment benefits.”
This article was originally published on WBUR.org.
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