Ed Driscoll.com Ed Driscoll.com
REAGANOMICS
By Ed Driscoll · June 10, 2004 01:00 PM · Capitalism, the Unknown Ideal

Stephen Moore writes:

In 1982 the Dow Jones industrial average hit a low of 800. After the final pieces of the Reagan tax cuts were installed, the market rocketed upward for 18 consecutive years. From 800, the Dow rose to 10,000 — creating between $15 trillion and $20 trillion in new wealth and industries. The Dow would have to climb to 100,000 by 2020 to match this Herculean performance. By clearing away the wealth destroyers of high tax rates and high inflation, U.S. companies became far more productive, profitable, and valuable.

The economy also created 15 million new jobs under Reagan and grew in real terms by 40 percent. Some have likened this to adding a new California to the U.S. economy.

By the end of the 1980s, in what was a fitting tribute to the Reagan program, almost all industrialized nations had sharply lowered tax rates to regain a competitive position lost to the U.S. in the decade. Reagan would note that "Imitation is the sincerest form of flattery." In this way, Reaganomics saved not just the U.S. economy from worldwide depression, but the entire global economy as well.

The Reagan way was spurned throughout the 1980s as "voodoo economics" (one of George Bush Sr.'s few memorable comments.) Many college textbooks to this day even argue that Reagan's economic policies were flawed because they created record budget deficits. But the textbooks don't mention that as the national debt rose by $2 trillion, national wealth rose by $8 trillion. They also don't mention that the Laffer curve worked: Lower tax rates did generate more tax revenues at the federal, state, and local levels. Federal tax collections rose from $500 billion in 1980 to $1 trillion in 1990.

Moore quotes Arthur Laffer, who says that at Reagan's first cabinet meeting as president, "Reagan, the seasoned actor, waited for silence in the Cabinet Room. He then stood and said, 'Gentlemen and ladies, I hate inflation, I hate taxes, and I hate Communism. Do something about it.'"

They did.

UPDATE: Get a load of this quote by Tom Brokaw, from a 1983 interview with far-left magazine Mother Jones:

“I thought from the outset that his ‘supply side’ [theory] was just a disaster. I knew of no one who felt that it was going to work, outside of a small collection of zealots in Washington and at USC – Arthur Laffer, Jack Kemp. What I thought quite outrageous was the business community, which for years carped and complained that it could never get a President sympathetic to its needs, finally got its champion, Ronald Reagan. Then, to its horror, it discovered that he was actually going to press ahead with supply side – a theory whose disastrous consequences businesspeople began desperately to prepare for, but did not publicly warn the rest of the country about. They knew it simply could not work. But what they did was look to their own little life raft and not to anyone else’s.”
Lots more quotes in a similar vein via that same link.

Comments


Since 2002, News, Technology and Pop Culture, 24 Hours a Day, Live and in Stereo!

(And every Saturday on Sirius XM Satellite Radio.)

What They're Saying

"As blogger Ed Driscoll noted..."--The Wall Street Journal


Navigation
Weblog
Ed TV
Podcasts
Twitter Feed
Articles
Essays
Interviews
Links
About Me
FAQ
Photos

Home

Support the Site

Search

Archives
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004
September 2004
August 2004
July 2004
June 2004
May 2004
April 2004
March 2004
February 2004
January 2004
December 2003
November 2003
October 2003
September 2003
August 2003
July 2003
June 2003
May 2003
April 2003
March 2003
February 2003
January 2003
December 2002
November 2002
October 2002
September 2002
August 2002
July 2002
June 2002
May 2002
April 2002
March 2002

Etcetera


Bookmark Me!

Blogroll Me!

Steal This Button!

Syndicate this site (XML)
Podcasts Feed

AddThis Feed Button

AddThis Social Bookmark Button

youtube_logo.gif

Our Podcasts' Apple iTunes Page

Powered by
Movable Type 3.35

Site design by
Sekimori

tumblr site counter
Copyright © 2002-2008 Edward B. Driscoll, Jr. All Rights Reserved