Without searching for threads, I think this is well plowed ground in both the Economy and History forums. Since such threads tend to go downhill pretty fast, I am not sure it is a good idea to resurrect the old threads.
Personally I would be delighted to participate in a thread about Reagan's economic policies. The hardest part would be to find agreement on what they were. Conservatives will point to his speeches and sound bites. Leftists will concentrate on his defense spending, increases in the public debt, and tax increases after 1981. We would probably end up arguing about which was the "real" RR.
Agreed. Those threads tend to get pretty personal pretty fast.
It seems he was of the opinion that tax cuts would stimulate the economy. He cut taxes on the wealthy. They got that much wealthier. Did everyone else.
Many indicators would say no.
But was it Reaganomics or just the globalization period we were going through.[/QUOTE]
OK, some quick thoughts on you last comment and a little background. In any period there are a bunch of things happening and they are all interconnected. Good economic analysis rest on three foundations and when one is ignored or botched, the results usually turn out to be ridiculous. Using Reaganomics for an example, the three are:
1. Historical analysis. Most economics starts here as "economic problems" are usually framed in a temporal context. They start out with "How did we get into this mess?" and quickly progress to "Could we have avoided this mess?" This way of initially framing a question has a number of drawbacks. The past is generally linear and unique. Events in year A are followed by events in year B and we rarely engage in counterfactual history. What happened; happened. But it creates an illusion that the events in year A CAUSED the events in year B, which may not be the case. It provides no grounds, even if there is a causal link, of demonstrating how strong the relationship is. Maybe what happened in year B was inevitable, regardless of what happened in year A (i.e. there is not causality between events in A and B; something other than events in A caused events in B). Now this is just the type of issues that historical method is best equipped to deal with. The usual tools usually are some sort of counterfactual history used to test the sensitivity of results to particular changes in the time line.
In the case of Reaganomics the big example of this is the question of the role of Reagan's military build-up in the economic collapse of the Soviet Union. The build-up clearly preceded the collapse, but in what fashion did it cause it? I have argued elsewhere (a History thread I believe) that there was little connection as the causes of the Soviet decline stretched further back and the system was unsustainable when Reagan took office. I'm bringing this up not to re-start that debate, but to point out that historical method is the usual way of addressing these issues.
The second necessary skill set is mathematical and statistical analysis of data. This is a pretty arcane field, which is why researchers in many fields have statisticians check their work. For example, when you count things in time series data the numbers always seem to get expotentially bigger. Everything seems a function of time. If the public debt was $X trillion when Reagan took office and $3X trillion when he left, then isn't that terrible? Well, not necessarily. There are ways of removing the "Point with pride, view with alarm" factor. We could concentrate on growth rates of increases rather than absolute levels, or we could look at ratios such as the size of the deficit as a percentage of GDP. This is data analysis, and I think you have to have a grasp as to how it's done to understand the numbers coming out of it.
Finally there is economic analysis. Economists carry around a tool belt of models to try to get to the essence of what's happening in a given situation. These models all have false assumptions to simplify the problem, such as actors have perfect knowledge and are immortal. The question is not how realistic the assumptions of the model are, but how sensitive the results are to the truth value of the assumptions. Hopefully you can change assumptions and still get pretty much the same results.
In the Reagan years the big debate was "supply-side" economics. It was based on an idealized expectation of how markets would behave, especially with regard to assumptions about price flexibility. The solution to a host of problems would be to concentrate on the supply side and increase the supply of goods and services. Lowering tax rates would increase individual effort and thus output. In 1981 this didn't work out too well because in a demand-constrained economy, too much of the benefit of lower taxes went to people who saved a substantial part of their income and there was no boost to demand. It did cause the deficit to explode, however, and when the attempted adjustments ran into sticky prices (especially wages) the policies floundered.
Like you, I believe that Reagan paid too much attention to anecdotal stories in arriving at this fundamental attitudes that dictated policy. He was adept at negotiation and compromise and didn't really mind the other party getting what they wanted if he got what he wanted. This made Reagan in practice not doctrinaire, despite his rhetoric. But it also made him opportunistic almost to the point of having no real core principals about leading the economy.
So let the fun begin.
