The Economic Genius of Ronald Reagan and Reaganomics…

reagan24ATLANTA— I have a fear of large-scale inflation occurring sometime in the next several years.  As some news sources have speculated, I believe Ben Bernanke’s mad quest to fight “deflation” could be the biggest reason. But I believe that Barack Obama’s policies and inclinations will also be a contributing factor. I believe his current indifference towards the federal deficit and his massive stimulus plan could be key contributors.  Copied below is an article by Robert J. Samuelson that does a superb job of explaining just how dangerous inflation is.

Mr. Samuelson’s article is about inflation in our country in the 1970’s.  It was a dramatic period that Mr. Samuelson rightly suggests has been forgotten by most Americans.  Just as interesting in this article is how remarkable it was that the dynamic duo of Paul Volker and Ronald Reagan withstood intense political pressure to put into place the correct policies to finally subdue inflation.  Because of his firm commitment to sound economic policy (some might say, “ideology”), Ronald Reagan was able to accomplish what Richard Nixon, Gerald Ford, and Jimmy Carter could not.  This article is an example that economic ideas really do matter- and that having clarity and perseverance in understanding and applying them is fundamental to success.  It is no small wonder that because of Ronald Reagan and his “Reaganomics,” the country enjoyed what at the time was the second-longest peacetime economic expansion in our nation’s history- the period from 1983 through 1990. 

Before letting you read the article, I have one last thought.  I was on a debate team in college and I recall traveling around the country to major universities, competing in debate tournaments and invariably running into young people with highly liberal views of the economy.  In any given debate about whatever topic, it was almost reflexive for the liberal (when under assault) to drop in the term “Reaganomics” with a slight sneer in order to settle a point.  It was as though the word itself, divorced from the economic concepts or history behind it, were a universally accepted axiom of bad and unfair economic policy that when associated with whatever point about free markets you were making, would inevitably sink your point and end the debate.  It didn’t, unfortunately.  The body of historical evidence suggesting Ronald Reagan’s economic policies were singularly successful in his time is rather overwhelming.  Nonetheless, I find liberals cannot seem to overcome their hatred for Reaganomics.  Accordingly, they would likely dismiss this article and its findings.  They would do so foolishly, I believe.

Lessons From the Great Inflation
Paul Volcker and Ronald Reagan’s forgotten miracle created a quarter century of prosperity–and a dangerous bubble of complacency.
Robert J. Samuelson | January 2009 Print Edition

If you asked a group of scholars to name the most important landmarks in the American story of the last half-century, they would list some or all of the following: the war in Vietnam, the civil rights movement, the assassinations of the Kennedys and Martin Luther King, Watergate, the sexual revolution, the invention of the computer chip, Ronald Reagan’s election in 1980, the end of the Cold War, the creation of the Internet, the emergence of AIDS, the terrorist attacks of September 11, and the two wars in Iraq. Looking abroad, these scholars might include other developments: the rise of Japan as a major economic power in the 1970s and ’80s, the emergence of China in the 1980s from its self-imposed isolation, and the spread of nuclear weapons.

Missing from most lists would be the rise and fall of double-digit U.S. inflation. This would be a huge oversight.

We have arrived at the end of a roughly half-century economic cycle dominated by inflation, for good and ill. Its rise and fall constitute one of the great upheavals of our time, though one largely forgotten and misunderstood. From 1960 to 1979, annual U.S. inflation increased from a negligible 1.4 percent to 13.3 percent. By 2001 it had receded to 1.6 percent, almost exactly what it had been in 1960. For this entire period, inflation’s climb and collapse exerted a dominant influence over the economy’s successes and failures. It also shaped, either directly or indirectly, how Americans felt about themselves and their society; how they voted and the nature of their politics; how businesses operated and treated their workers; and how the American economy was connected with the rest of the world. Although no one would claim that inflation’s side effects were the only forces that influenced the nation during these decades, they counted for more than most historians, economists, and journalists think. It’s impossible to decipher our era, or to think sensibly about the future, without understanding the Great Inflation and its aftermath.

Stable prices provide a sense of security. They help define a reliable social and political order. Like safe streets, clean drinking water, and dependable electricity, their importance is noticed only when they go missing. When they did just that in the 1970s, Americans were horrified. From week to week, people couldn’t know the cost of their groceries, utility bills, appliances, dry cleaning, toothpaste, and pizza. People couldn’t predict whether their wages would keep pace with prices. People couldn’t plan; their savings were at risk. And no one seemed capable of controlling inflation. The inflationary episode was a deeply disturbing and disillusioning experience that eroded Americans’ confidence in their future and their leaders.

There were widespread consequences. Without double-digit inflation, Ronald Reagan almost certainly would not have been elected president in 1980; the conservative political movement that he inspired would have emerged later or, conceivably, not at all. High inflation incontestably destabilized the economy, leading to four recessions (those of 1969–70, 1973–75, 1980, and 1981–82) of growing severity. High inflation stunted the increase of living standards through lower productivity growth. High inflation caused the stock market to stagnate; the Dow Jones Industrial Average was no higher in 1982 than in 1965. And it led to a series of debt crises that afflicted American farmers, the U.S. savings and loan industry, and developing countries.

Afterward, declining inflation—“disinflation”—led to lower interest rates, which led to higher stock prices and, much later, higher home prices. This disinflation promoted the last quarter century’s prosperity. In the two decades after 1982, the business cycle moderated so that the country suffered only two relatively mild recessions (those of 1990–91 and 2001), lasting a total of 16 months. Monthly unemployment peaked at 7.8 percent in June 1992. As stock and home values rose, Americans felt wealthier and borrowed more or spent more of their current incomes. A great shopping spree ensued, and the savings rate declined. Trade deficits—stimulated by Americans’ ravenous appetite for cars, computers, toys, and shoes—ballooned. At the same time, this prolonged prosperity helped spawn complacency and carelessness, which ultimately climaxed in a different sort of economic instability and the financial turmoil that assaulted the economy in 2007 and 2008.

Who Was to Blame?

Double-digit inflation was not an act of nature or a random accident. It was the federal government’s greatest domestic policy blunder since World War II, the perverse consequence of well-meaning economic policies, promoted by some of the nation’s most eminent academic economists. These policies promised to control the business cycle but ended up making it worse.

The episode invites comparison with the war in Vietnam, the biggest foreign policy blunder in the post–World War II era. Both arose from good intentions: The one would preserve freedom; the other would expand prosperity. Both had intellectuals as advocates, whether economists or theorists of limited war. Both suffered from overreach and simplification; events on the ground constantly confounded expectations. But there is a big difference. One (Vietnam) occupies a huge space in historic memory. The other (inflation) does not.

This inflation had no comparable precedent in American history. Sudden bursts of inflation had occurred before, almost always during wars when the government printed more money to pay for guns, soldiers, ships, and ammunition. What happened in the 1960s and ’70s was different. America’s most protracted peacetime inflation was the unintended side effect of policies designed to reduce unemployment and eliminate the business cycle. It was a product of the power of ideas.

In the 1960s, academic economists argued—and political leaders accepted—that the economy could be kept permanently near “full employment” (initially defined as 4 percent unemployment). Booms and busts, recessions and depressions, had long been considered ugly and unavoidable aspects of industrial capitalism. But once people accepted the idea that the business cycle could be mastered, the self-restraint that had silently kept prices and wages in check gradually crumbled. New assumptions emerged. If government could prevent recessions, then companies could always count on strong demand for their products. All higher costs (including higher labor costs) could be recovered through higher prices. Similarly, if the economy was always near “full employment,” then workers could press for higher wages without facing job loss. If their current employers wouldn’t pay, someone else would. Government wouldn’t tolerate substantial unemployment; that was its promise. The result was a stubborn wage-price spiral. Wages chased prices, which chased wages. Inflation became self-fulfilling and entrenched.

Everything rested on an illusion, the Phillips Curve: the notion that there was a fixed tradeoff between unemployment and inflation. If true, that meant a society could consciously decide how much of one or the other it wanted. If, say, 4 percent unemployment and 4 percent inflation seemed superior to 5 percent unemployment and 3 percent inflation, then we could choose the former. The trouble was that the tradeoff didn’t exist, except for brief periods. In an important 1968 paper, the economist Milton Friedman explained that, if government tried to hold unemployment below some “natural rate,” the result would simply be accelerating inflation. Another economist, Edmund Phelps of Columbia University, developed the concept almost simultaneously. By their logic, governmental efforts to push unemployment down to unrealistic levels were doomed to failure.

What would actually happen in the 1970s—the constant acceleration of inflation—was foretold by Friedman and Phelps. But good ideas could not spontaneously displace the bad until actual experience demonstrated the differences, especially because the bad ideas were more politically attractive. For inflation to be reversed, the underlying politics and psychology had to change.

Americans detested inflation. We seemed to have lost control, both as individuals and as a society, over our fate. Since 1935, the Gallup Poll has regularly asked respondents, “What do you think is the most important problem facing the country today?” In the nine years from 1973 to 1981, “the high cost of living” ranked No. 1 every year. In some surveys, an astounding 70 percent of the respondents cited it as the major problem. In 1971 it was second behind Vietnam; in 1972 it faded only because wage and price controls artificially and temporarily kept prices in check. In 1982 and 1983, it was second behind unemployment (and not coincidentally: the high joblessness stemmed from a savage recession caused by inflation).

Among government officials, there was a widespread fatalism about continued inflation. President Carter often seemed forlorn at the prospect. Early in 1980, he was asked at a press conference what he planned to do about the problem. He replied, “It would be misleading for me to tell any of you that there is a solution to it.” His resignation was common. Inflation had so insinuated itself into the fabric of everyday life, the thinking went, that it could not be easily extracted. The standard remedy would be a horrific recession, or a depression, that would reduce wage and price increases. Inflation was rationalized as a reflection of the deeper ills of American society. It was not a cause of our problems; it was a consequence of our condition. Specifically, it was said to show that the nation was becoming ungovernable. Americans had more wants (for higher pay, more government programs, a cleaner environment) than could be met.

When Ronald Reagan won in a near landslide—50.7 percent of the popular vote against Carter’s 41 percent—inflation was the dominating concern. Voters didn’t know that Reagan could control it; but they did know that Carter couldn’t. Later, Carter himself judged that inflation had been the decisive issue against him, more important than his mishandling of the Iranian hostage crisis. Exit polls showed that 47 percent of Reagan’s voters rated “controlling inflation” as the most important issue, followed closely by 45 percent who valued “strengthening America’s position in the world.” In the Gallup Poll in September, 58 percent rated inflation as the No. 1 problem.

How Inflation Was Subdued

The subjugation of inflation was principally the accomplishment of two men: Paul Volcker and Ronald Reagan. If either had been absent, the story would have unfolded differently and, from our present perspective, less favorably. Reagan, president from 1981 to 1989, and Volcker, chairman of the Federal Reserve Board from 1979 to 1987, forged an accidental alliance that was largely unspoken, impersonal, and misunderstood. There was no particular personal chemistry between the men. Nor was there any explicit bargain—you do this, and I’ll do that. Although Reagan supported Volcker, many officials in his administration openly criticized him. Even while the alliance flourished, it sometimes seemed a mirage.

But the alliance was genuine, a compact of conviction. Both men believed that high inflation was shredding the fabric of the economy and of American society. The country could not thrive if it persisted. Buttressed by these beliefs, they broke with the past. Each had a role to play, and each played it somewhat independently of the other.

Volcker took a sledgehammer to inflationary expectations. He raised interest rates, tightened credit, and triggered the most punishing economic slump since the 1930s. In December 1980, banks’ “prime rate” (the loan rate for the worthiest business borrowers) hit a record 21.5 percent. Mortgage and bond rates rose in concert. By the summer of 1981, consumers had trouble borrowing for homes and cars. Many companies couldn’t borrow for new investment. Industrial production dropped 12 percent from mid-1981 until late 1982. In many industries, declines were steeper. In autos, it was 34 percent (from June 1981 to January 1982), and in steel it was 56 percent (from August 1981 to December 1982). By 1982 the number of business failures had tripled from 1979. Construction starts of new homes in 1982 were 40 percent below the 1979 level. Worse, unemployment exploded. By late 1982, it was 10.8 percent, which remains a post–World War II record.

It is doubtful that, aside from Reagan, any other potential president would have let the Fed proceed unchallenged. Certainly Carter wouldn’t have, had he been re-elected, nor would his chief Democratic rival, Sen. Edward M. Kennedy (D-Mass.). Both would have faced intense pressures from the party’s faithful, led by unionized workers—especially auto- and steelworkers—who were big victims of Volcker’s austerity. Nor is it likely that any of the major Republican presidential contenders in 1980 would have acquiesced, including George H.W. Bush, Howard Baker, and John Connally. Reagan’s initial economic program promised to reduce the money supply to curb inflation. He was the first president to make that part of his agenda, and he never retreated from it. As the economy deteriorated, he kept quiet. He refused to criticize Volcker publicly, to urge a lowering of interest rates, or to work behind the scenes to bring that about.

When the president did speak, he supported Volcker. At a press conference on February 18, 1982—with unemployment near 9 percent—Reagan called inflation “our No. 1 enemy” and referred to fears that “the Federal Reserve Board will revert to the inflationary monetary policies of the past.” The president pledged that this wouldn’t happen. “I have met with Chairman Volcker several times during the past year,” he said. “We met again earlier this week. I have confidence in the announced policies of the Federal Reserve.” Reagan’s patience enabled the Federal Reserve to maintain a punishing and increasingly unpopular policy long enough to alter inflationary psychology.

There was an outpouring of bills and resolutions to impeach Volcker, roll back interest rates, or require the appointment of new Fed governors sympathetic to farmers, workers, consumers, and small businesses. Rep. Jack Kemp (D-N.Y.), a prominent Republican “supply-sider,” wanted Volcker to resign. In August 1982, Sen. Robert C. Byrd of West Virginia, the Democratic floor leader, introduced the Balanced Monetary Policy Act of 1982, which would have forced the Fed to reduce interest rates.

Reagan’s popularity ratings collapsed. In May 1981, early in his presidency, Reagan’s approval had reached a high of 68 percent. By April 1982, it was 45 percent (46 percent disapproved); by January 1983, it was 35 percent, the low point (56 percent disapproved). As the economy sank, Reagan was advancing an economic program of across-the-board tax cuts, widely portrayed as favoring the rich, and spending cuts, widely portrayed as hurting the poor. He was portrayed as spearheading an economic assault against ordinary Americans.

On inflation, Reagan was clear-eyed. “Unlike some of his predecessors, he had a strong visceral aversion to inflation,” Volcker later said. Reagan was “influenced by people like Milton Friedman and understood that inflation was always a monetary phenomenon,” that it was “too much money chasing too few goods,” said William Niskanen, a member of Reagan’s Council of Economic Advisers. “He was the first president who understood that.…He knew that controlling inflation by regulation [controls] was absurd.”

Even now, the social costs of controlling inflation seem horrendous. Over a four-year period (1979–82), the U.S. economy’s output barely increased. It nudged ahead in the first two years and then fell back in the last two. Since 1950, there had been nothing like that. Unemployment peaked in 1982 near 11 percent—a figure that, a few years earlier, would have been widely judged inconceivable. Although lower inflation benefited most people, the casualties were numerous and broadly dispersed geographically and socially: small business owners, overextended farmers, industrial workers. The number of business failures in 1982 (24,908) was nearly 50 percent higher than in any other year since World War II, and it would double to 52,078 by 1984. From 1979 to 1983, farm income declined almost 50 percent.

But against these heartbreaking costs, there were larger long-term gains. Once the recession lifted, the economy and productivity growth revived impressively. When Reagan left office, Americans still worried about inflation, but it no longer gripped them with fear. Inflation was one problem among many, not a scourge shredding the social fabric. The taming of inflation reinvigorated the economy as nothing else; the expansion lasted from early 1983 until the late summer of 1990. At the time, it was the second longest peacetime expansion in U.S. history.

The Volcker-Reagan campaign discredited many of the ideas that had misgoverned national economic policy for nearly two decades. The notion that the Federal Reserve couldn’t control inflation was discredited. The notion that a little less unemployment could be exchanged for a little more inflation was discredited. In their place, a consensus slowly developed that “price stability”—a vague term that both Volcker and his successor, Alan Greenspan, defined as inflation so low that it barely affected people’s decisions—was desirable and would promote a more stable and productive economy.

The Forgotten Crisis

One of the dilemmas of a democratic society is how to take actions that, though immediately painful and unpopular, seem essential to the society’s long-term well-being. Coping with double-digit inflation posed precisely this problem. Any realistic program was bound to hurt millions of Americans, almost all innocent victims. This was so obvious that in the late 1970s a frontal assault on inflation seemed impossible.

What Volcker and Reagan wrought now seems ancient history: an isolated episode with little relevance to our present condition. This is utterly wrong. For every nation, there are crucial demarcation points that fundamentally alter society. The greatest of these for the United States was the Civil War. The Great Depression and World War II created another massive chasm. In our era, the fall of double-digit inflation is one of those separation points, though on a smaller scale—a gorge, not a canyon. Something profound and pervasive occurred: what I call the restoration of capitalism. Much of what we now consider routine and normal originated in the tumultuous transition from high to low inflation.

A majority of today’’Americans have never experienced double-digit inflation. In 2008 slightly more than 60 percent of today’s roughly 300 million Americans were born in 1962 or later, meaning that the oldest of them would have been only 17 or 18 when inflation peaked in 1979 and 1980. They were too young for it to have made much of an impression. Even for some of those who lived through it, the memory of inflation has faded.

In a very superficial way, that provides a serviceable explanation for the way inflation’s memory has faded. But the same arithmetic applies to Vietnam—indeed more so, since it was an earlier event—and yet Vietnam retains a powerful grip on the national consciousness. Something else must be at work.

Closer to the truth, I think, is a collective failure of communication and candor by the nation’s economists. At its base, double-digit inflation was their doing, a product of their bad ideas. There is now a widespread recognition of this, and although there are many technical studies of inflation and of the period of high inflation, there has not been much in the way of public apologies (from those who were complicit in the error) or reprimands (from those who were not, because they either dissented or were too young). There seems to be an unspoken pact of self-restraint to let bygones be bygones, perhaps out of collective embarrassment or a recognition that dwelling excessively on past failures might compromise economists’ prospects as government advisers and high-level appointees.

Over the course of 2008, inflation has risen to the uncomfortable level of about 5 percent, driven largely by higher prices for oil and food emanating from international markets. Whether it will go higher or subside to the negligible range of zero to 2 percent (a level at which most economists believe prices changes are so slight that they barely affect most consumers or businesses) is impossible to say. What is less uncertain is the similarity between our present predicament and the situation that led to higher inflation in the 1960s and ’70s. Then, a little inflation seemed unthreatening; but a little led to a little more, and a little more led to a lot.

This article is adapted from The Great Inflation and Its Aftermath: The Past and Future of American Affluence, written by Robert J. Samuelson and published by Random House. Samuelson, a columnist for Newsweek and The Washington Post, is also the author of The Good Life and Its Discontents: The American Dream in the Age of Entitlement. © 2008 by Robert J. Samuelson. Reprinted by arrangement with the Random House Publishing Group.

About Stephen VanNuys
Stephen Van Nuys is a happily married CPA who works for a large accounting firm and resides in Atlanta, Georgia. He is a Christian and an avid follower of politics and current events. He is also a big-time baseball fan. Stephen and his wife are runners, having completed multiple 10k’s and half-marathons between them. They place importance on being environmentally conscious and actively serving others through their church and other outlets. Mr. Van Nuys’ political leanings are socially conservative and economically libertarian. He may express his perspectives on current events strongly, but he welcomes disagreement, particularly where others believe his missives to be ill-informed or just plain wrong! He enjoys good debate and discussion and is writing here as much to express his perspectives as he is to learn about others.

19 Responses to The Economic Genius of Ronald Reagan and Reaganomics…

  1. JimAnderson says:

    This would be a great article for “the Onion!” I mean putting Reagan and economic genious in the same sentence is a joke, right? This is Dec. 22, 2008, right?

  2. Ha! This is something you and I just won’t agree on. I’ll let this comment slide. ;)

    I just think implementing policies that helped spur the second-largest peacetime expansion of the economy in US history(per Samuelson’s article above) is tough to shake a stick at. Obama’s coming from the opposite direction as Reagan and (I think) hopes to be the anti-Reagan- the guy who gives us the tectonic shift back to the left of center. He’s got a tall order to beat the Reagan legacy on the economy as far as this goes.

    Another thought- Samuelson did put the caveat of “at the time” along-side “second-largest expansion” in his article, which I took to mean Clinton may have beat that record (though I’m too lazy to research it at this moment).

    But Arthur Laffer has been quoted as saying Clinton was a bigger supply-sider than Reagan and Laffer was a huge fan of Clinton in that respect. I’ve learned to have a lot of respect for what Clinton did for the economy as well, the more I’ve come to understand his policies. Doesn’t mean I agree with everyone (including his push for more subprime lending in the late 1990s- that was clearly disastrous). But his focus on fighting deficits, etc. were very helpful.

    I’m sure you’ll disagree on Clinton as well.

    Keep coming by and commenting. We enjoy the debate!

  3. We’ll see, VanNuys. I don’t think Obama is as stupid as some hope, in that he’d turn his back on the well defined relation of interest rates and inflation as discovered by Volker and Reagan. So far he has packed his economic team with former Clinton thinkers and supply siders.

    I think he’ll attempt to implement liberal agendas with supply side style economics. He’s already said his tax hikes wouldn’t be a good idea for this economy… (just as he has reneged on his Iraq plan)

    I think we’ll see four more years of low taxes and big government spending. Only this team the word “Nuclear” will be pronounced correctly.

    But as for your research quest you’re too lazy to look up, there was a missive with all the data you seek posted on this site not more than a month and a half ago… It charted all the economic growth since 1945…ish

  4. Arnold Thomas says:

    You would think with todays technology we could bring Reagan back to life and let him have another shot at it. Then again the late president would probably do better from the grave than Obama will do from the oval office.

  5. Jim Anderson says:

    Reagan’s, supply-side, voodoo economics was ponsie scheme that just unraveled right before your eyes yet you still believe? You can lead a horse to water…

  6. Jim Anderson says:

    Finally you’re recognizing or at least expressing through the words of another that Clinton was a son of Reagan and your partner in crime Chief Crazy Talk is starting to get it too with his most recent assessment of Obama one which is 180 degrees away from what he was saying oh a month or so ago. Neither of you would know a liberal or a socialist if they walked up to you and bit you on the derriere.

  7. Jim Anderson says:

    Finally (Mr. VanNuys) you’re recognizing or at least expressing through the words of another that Clinton was a direct descendant of Reagan economically and your partner in crime Chief Crazy Talk is starting to get it too with his most recent assessment of Obama (an almost 180 degree flip from his position oh a month or so ago). Neither of you would know a liberal or a socialist if they walked up to you and bit you on the derriere. It’s obvious that the two of you were in your diapers when Reagan was in the White House too. Keep your eyes and ears open and learn, the hard lessons have only just begun!

  8. Arnold Thomas: Reagan back in office would be nice. Some one of his leadership skills will be needed in order to make the tough descisions and not surcome to the calls of the foolish seeking the placebo’s of “quick fixes” and instant gratification. And, as has been pointed out on this site many, many times, with incredible consistancy, Clinton was a supply-sider, and most of Clinton’s economic advisors are on Obama’s team. I’d still perfer a social conservative in office over Obama’s social liberalism, but these are the times. I don’t intend to walk down the path of the extreme wingers who spent the last eight to twenty eight years complaining and bad mouthing their country.

  9. Yeah Jim Anderson- I have to admit, my assessments of Obama are changing all the time. Probably less because of me and more because of Mr. Obama himself- he is a bundle of surprises (for better or worse).

    I thought he’d be pretty far to the left, but he seems to be a little bit all over the place right now (though more generally in the middle). He seems to have caused some ire among his really liberal base on a few of his policy shifts. I guess in retrospect this should have been expected after his shifts back in July. But at that time, I thought those shifts were to win the election and were not representative of how he would actually govern. Anyway – we’ll wait and see.

    To the extent he does follow Clinton and Reagan on the economy, I continue to believe that would be a good thing…

  10. Jim Anderson says:

    Well, Mr. VanNuys, being able to recognize trends in politicians clearly comes with age and experience and not to be disrespectful they are two qualities you and your partner Chief Crazy Talk seem to be lacking. My guess is that the two of you rarely, if ever, step out beyond the culture, ideology and general mindset you hold so dearly, which is another weakness of course. Varied life experiences are, in my humble opinion, what bring about wisdom.

    Ronald Reagan was absolutely nothing like the two of you describe. There again the two of you clearly lack the two critical experiences necessary for good judgment, the practical experience of having been a thinking adult during Reagan’s time in the White House and the ability to consider opposing views about him.

    One thing is very clear this Blog clearly identifies YOUR changing opinions and hopefully that will go a long way in your political education. Hopefully?

    President elect Obama doesn’t think or write for you Mr. VanNuys so using him as an excuse for your own judgment and journalistic shortcomings, “Probably less because of me and more because of Mr. Obama himself- he is a bundle of surprises (for better or worse).” is not at all becoming (or professional).

    Following Reagan, Bush 1, Clinton and Bush 2 will deepen this already historical, seemingly bottomless and disastrous economic recession! Again, your stubbornness and inexperience is showing!

    Time and experience is the answer here Mr. VanNuys as the lessons parted out thus far have yet to sink in with you. You seem clearlt to me to be one of those it hasn’t happened to me so it isn’t happening types. My experience tells me you will come around to reality before it’s all said and done as this economy is a looooong way from finding it’s bottom, trust me!

    Please by all means feel free to flag my posts and see if you can throw them back in my face later on. I have a strong feeling my age and experience regarding these matters are going to trump your ideology and lack of experience. In that regard I think we are already noticing a trend, no?

    A belated Merry Christmas and a Happy New Year to y’all.

  11. >Well, Mr. VanNuys, being able to recognize trends in politicians clearly comes with age and experience

    Ha! I always enjoy your wise perspective. ;)

    At this point, unfortunately, it is a wait and see. I think now government action (forthcoming Obama stimulus, Fed monetary policy, TARP, Detroit bailout, etc.) is so tied to our recovery that any success or failure we will have over the upcoming years will be more the result of government than of markets themselves. As you can imagine, I’m rather pessimistic myself about our chances of a fast recovery for this very reason. History is generally not kind to central planners.

    As you have seen, I have written against just about every piece of government intervention that has been tried. I admit I will be forced to rethink my opinions in a year or two should all this economic intervensionism actually work. I’m not so certain now that I will be in such a position, but I’m humble enough to recognize I could be.

    As for feeling the effects of this recession, I have not personally (yet). But I have plenty of friends and family who have, so I know the pain this is causing a lot of people. Thus, I’m very interested and engaged in what the government is doing. I’m afraid they are in the process of making big mistakes, loading us up with all this debt we’ll have to pay back. I find it discouraging- for myself and those who are affected.

    We’ll see though, we’ll see.

    A belated Merry Christmas and a Happy New Year to you as well! Thanks again for dropping by and continuing the debate. These are times when ideas really matter. I am interested to see which ideas work in the end…

  12. >My guess is that the two of you rarely, if ever, step out beyond the culture, ideology and general mindset you hold so dearly, which is another weakness of course.

    Actually, just remembered I wanted to react to this statement. This actually couldn’t be further from the truth as far as our life experiences. The majority of our shared friends from college are pretty solid liberals (socially, economically, etc.). In fact, most of my blog posts are inspired by debates I have with them via e-mail throughout the week.

    Further, a chunk of our family is non-religious, agnostic (though there are certainly a healthy portion that are Protestant or Catholic). In addition to this, most of them are either poor or middle class (our upbringing could be described in the same manner).

    Finally, as I reference above in this post, I was on a debate team in college and spent a good deal of time my senior year in various universities around the country debating economic and social topics. Overwhelmingly, the teams we faced were liberal- so my teammate and I were debating liberal viewpoints constantly.

    So- I think based on all of this that I am pretty well accustomed to liberal viewpoints and perspectives and am pretty comfortable discussing them. The same can be said of my brother, Chief Crazy Talk (I think that moniker is pretty funny btw).

    At any rate, despite all this exposure, we remain obviously committed to our conservative perspectives.

    I think on economic topics in particular, my experience is that the really liberal viewpoints are often expressed by people who have limited exposure to business themselves. People who have run small businesses or have worked inside businesses on the operations side in my experience, tend to have more conservative views about such matters. Their economic views frequently begin to line up with the realities around them about how markets work, etc. There are exceptions to this surely, but I think as a general rule it is true.

    As always- I enjoy the discussion! (I’ll let Chief Crazy Talk speak for himself).

  13. Jin Anderson says:

    Please keep central to your responses moving forward what economic system was in place (Supply Side) and for twenty eight years (as you admitted even Clinton, the only Democrat in the White House since 1980, was a pro corporate, supply sider), what party (Republican) was in the White House when it all came tumbling down, remembering with six years of Republican control in the house, and who it was (Corporate America and Wall Street) that went to Washington begging, with a tin cup in hand, for SOCIALISM and we’ll have no problem at all. It was and there is NO WAY AROUND IT, the profligate and wanton philosophies of the above economic culture, that you and your partner Chief Crazy Talk support and continue to support on this site that have created the greatest economic disaster this country has seen since the Great Depression! Interestingly enough, before it’s over it may be this economic downturn that becomes the standard bearer for all economic disasters moving forward! It would be completely disingenuous and wholely inaccurate for you to frame your articles and responses moving forward any other way. I have no doubt that you will come out the other side of this mess a different person or at least that is what I hope. Just being frank. ;-)

    I don’t know if anyone or any system can erase a 1 trillion dollar deficit an 11 trillion dollar debt and the export of a countries manufacturing base, do you? Again keeping the realities of this situation central to the discussion is essential to a reasonable dialog without it I will not participate.

    It is interesting though how extremism begets extremism isn’t it?

  14. Jin Anderson says:

    “Actually, just remembered I wanted to react to this statement. This actually couldn’t be further from the truth as far as our life experiences. The majority of our shared friends from college are pretty solid liberals (socially, economically, etc.). In fact, most of my blog posts are inspired by debates I have with them via e-mail throughout the week.”

    It may come as a surprise to you Mr. VanNuys that most of the population in the US of A is not college educated and that is arguably the most clear line of economic distinction available to us in this ongoing conversation. In addition, it is the most clear line of distinction you draw in your supply side, conservative, pro-corporate, anti union (labor) articles and responses on this blog to those who point it out (Me), and as such the culture I am referring to in virtually all of my responses.

    Now to be honest I’m not at all surprised by your response as this is exactly what I am referring to below,

    “My guess is that the two of you rarely, if ever, step out beyond the culture, ideology and general mindset you hold so dearly, which is another weakness of course.”

    The fact that you think your liberal college roommate, or your liberal debating opponent at another college is somehow the furthest culture imaginable from you regarding economic theory is the perception problem I am trying to expose here. It is this mindset in particular that that shapes your perspective and unrealistically so, that is, in my humble opinion.

    I like the business owners experience perspective issue you raise too but I clearly understand that there are two sides and two different perspectives to that equation. It’s just that it has clearly been so completely one sided for 28 years (pro business) that is not at all a wonder to me that one side having been served so completely has caused such a disaster? I am trying my best to shine a little light here, that’s all.

    Also interesting is that you mention allowing Chief Crazy Talk to answer for himself when he ALWAYS used to answer for you. Interesting? I think so.

    “At any rate, despite all this exposure, we remain obviously committed to our conservative perspectives.”

    I beg to differ Mr VanNuys as it seems that every post you seem hold a little less firmly to said principles than before.

    Ahhh time and experience, there really is no substitute.

    Best to you both.

  15. he ALWAYS used to answer for you

    Actually, I respond to your comments to VanNuys as this site was developed with the intent to engange in a conversation about the topics of the missive. The only draw back is there has been a deciding lack of supportive documentation to read concerning your implied views.
    With each query I make regarding such support, I am greeted with a snide remark, such as “ever heard of google?”
    I love having you on the blog. And I’d love nothing more than to read more of your ideas as espoused by other sources.
    It is impossible for me to firmly reach a new conclusion on a topic if the new conclusion is provided from merely one source with no cross reference. And if no desire to provide the cross references is shown, then I can only conclude that the point of view is not entirely worth defending.

    Please don’t take any of these comments as a snide, polemic remark towards you. I’m just being honest. And I hope with you being frank, you will undestand as much.

    Hope you had a merry Christmas. It’s been cold in SoCal, Cold in Massachussetts, cold just about everywhere except the South. I heard it was 70 on Christmas day in the south… It rained out here and was about 58.

    And just for the record, my view of Obama has not changed 180°. I thought he was a liberal prior to the election. I think he is a liberal now. He does seem to be fulfilling some of my pre-election hopes concerning him though. But if we had to measure my change in view in terms of degrees, it’s probably changed about 40° or so. 38° to 40°.

  16. Jin Anderson says:

    Why the confrontational attitude, insults and negativity? I mean there really is no other way to take those comments. Open that up to other posters to the site and get their opinion. Have them read this string and see what they say.

    Obama is a Centrist alla Clinton which is why he has filled many cabinet posts with Clinton’s cabinet choices. Pro NAFTA appointees of which there are several occupying key positions of importance would NEVER be the choice of a liberal.

    Oh your opinions of Obama and other things have changed in my opinion my friend and my guess is they will continue to do so.

    I am very curious though what you are talking about here, “It is impossible for me to firmly reach a new conclusion on a topic if the new conclusion is provided from merely one source with no cross reference. And if no desire to provide the cross references is shown, then I can only conclude that the point of view is not entirely worth defending.” and be specific and make it in reference to my posts to this particular string so as to not muddy the water.

    I think your young, immature and inexperienced
    and about to learn (or at least I hope so) a lot about economics, but “Please don’t take any of these comments as a snide, polemic remark towards you. I’m just being honest.”

    Happy Holidays, honestly.

  17. Pingback: Stephen VanNuys: Top 5 Most Popular Missives « American Missive

  18. i like this post. thanks.

  19. Proctor S. Burress says:

    Sirs:

    Please do not operate any farm machinery or drive on Interstate highways while on your present medications!

    Thank you,

    Proctor

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