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| 2004/6/14-15 [Politics/Domestic/President/Reagan] UID:30799 Activity:insanely high |
6/14 The Myth of Reaganomics
http://www.mises.org/fullstory.asp?control=1544
\_ http://www.nationalcenter.org/WCT010804.html
\_ MISES!
fuck that I use to think that was the bomb 5 years ago... then I
realized how inefficient markets are, and there is nothing we can
do to stop it perfect competitions DOES NOT WORK- it has been
proven- its the whole line of research called Neo-Keynesian, led by
some buy named Romer from Stanford (at least that is where he use
to teach)
\_ If we had perfected the market or government or anything else
we'd be doing. It isn't perfect but it is certainly proven to
be more efficient than a heavy top-down command economy.
\_ Hey, where'd the reply go that said this was from a right wing
nutcase site? If you had read the article you'd see it is quite
the opposite. Stop knee-jerking. -!op
\_ decent article; thank you -darin
\_ I am no fan of Reagan, but I have a hard time accepting this article
as credible. For example, he oversimplifies the issue of dumping
as something which is purely beneficial to the American consumer.
I thought dumping referred to situations where foreign governments
subsidized production costs and sold them below cost in order to
put local firms out of business. That definitely does not follow
the spirit of free trade. --jeffwong
\_ Dumping also can be used to stabilize a local commodity. For
example, the EU dumps agricultural products globally to keep
their food costs stable.
\_ helo, this is another topic a little large for the motd but:
while dumping exists in theory ... the idea of killing off
a domestic industry to later apply monopoly pricing, but in
reality this is extrmely unlikely. first of all, if the
foreign country has multiple suppliers, they will compete
among themselves. it would be odd for either all of
them to collude to sell at the lower price ... if only one
them to collude to sell at the lower price. If only one
acts, then that firm is making all the losses in return for
only part of the mkt when the loss making eventually stops.
if a foreign country wants to subsidize you "forever"
If a foreign country wants to subsidize you "forever"
that might not be so bad. when the banner of dumping is
being waved it is almost certainly going to be an industry
group and their "captured" regulators and politicial and
not any kind of broad consumer group or academics. [you can
waved it is almost certainly going to be an industry
group and their "captured" regulators and politicians,
not any kind of broad consumer group nor academics. [you can
google for (mexican tomato florida dumping)]. also you cannot
naively look at prices. something like 75% of the trade vol
between the us and japan is between parts of the same firm,
so the transfer prices are not necessarily "true" prices.
while i dont ness buy the comment about EU price stability
[i think it is about income support for domestic political
reasons, not price stability, nor mercantilist market
conquest], but it is correct that another wrinkle has to
do with capacity management, so you cannot immediately assume
a price differential represents dumping [this is a somewhat
involved scenario [see e.g. Ethier, Wilfred: "dumping",
in J. Political Econ.] these comments are relvant to the
involved scenario, see e.g. Ethier, Wilfred: "Dumping",
in J. Pol. Econ.]. n.b. these comments are relvant to the
post ~1980 era, as the legal regime as well as poltical
realities have changed over time. ok tnx. --psb
\_ Hi Partha. You should learn a useful English trick of
structuring your thoughts into paragraphs, rather than
throwing up all over the motd like kinney, punctuation
and readability be damned. Thank you, come again!
\_ Wow. Partha and Kinney in the same thought. Never
thought I'd see the day.
\_ excluding "helo ... ok tnx --psb" there are 278 words
in that posting. this is to convey something that
would take about 1.5 pages and a graph and 2 footnotes
to do "uncompressed" ... so yes, it might be a little
lossy. --psb
\_ It's 'lossy' because it's poorly written, not because
it's compressed. Write better, don't look like a
dumbass.
\_if i am willing to spend t time on something that
t is partitioned between content and form. i am
sorry you disagree with my tradeoff. if you want
to edit it and send me a note, i'll consider
pasting that in. sometimes i'm willing to write
something up nicely and put it in ~psb/MOTD
and sometimes currente calamo is the best i can
do. if you have some particular interest in this
and want a clarification, you are welcome to
send me a mail. --psb
\_ your lack of form dimishes the quality of the
content by making it unreadable. free flow
thought is available by trying to talk with
any of the fucked up homeless people babbling
on the streets.
\_ hey partha's response was pretty good
considering the average quality level of
content on the motd. The gist of it makes
sense. Do you think he's going to waste
time carefully editing his reply to please you?
-jeffwong
\_ He should waste his time carefully editing
his reply to please me, though. -- ilyas
\_ It was ok, but really, if you're going to
bother writing that much, why not stick in
a few commas and maybe a period here and
there? If the point is to make a point,
then grammar, spelling, and punctuation
count. If the point is to just fluff his
ego then it doesn't matter if anyone else
can read it.
\_can anayone name a single successful dumping case
where the person complaining wins in court rather than
just pressuring the govts to compromise if not out and
out losing in court? --psb
\_ Didn't the various asian memory makers get smashed a
few years ago?
\_ These guys are a libertarian think tank, so they don't really
believe in regulating markets much. I don't really agree
with that part, but I thought that whole thing was well
researched, well thought out and reasonably accurate. -op |
| 4/4 |
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| www.mises.org/fullstory.asp?control=1544 Perhaps the best way of discovering those goals is to recall the heady days of Ronald Reagan's first campaign for the presidency, especially before his triumph at the Republican National Convention in 1980. In general terms, Reagan pledged to return, or advance, to a free market and to "get government off our backs." Specifically, Reagan called for a massive cut in government spending, an even more drastic cut in taxation (particularly the income tax), a balanced budget by 1984 (that wild-spender, Jimmy Carter you see, had raised the budget deficit to $74 billion a year, and this had to be eliminated), and a return to the gold standard, where money is supplied by the market rather than by government. In addition to a call for free markets domestically, Reagan affirmed his deep commitment to freedom of international trade. Not only did the upper echelons of the administration sport Adam Smith ties, in honor of that moderate free-trader, but Reagan himself affirmed the depth of the influence upon him of the mid-19th century laissez-faire economist, Frederic Bastiat, whose devastating and satiric attacks on protectionism have been anthologized in economics readings ever since. President Reagan appointed an allegedly impartial gold commission to study the problem--a commission overwhelmingly packed with lifelong opponents of gold. The commission presented its predictable report, and gold was quickly interred. Let's run down the other important areas: Government Spending. How well did Reagan succeed in cutting government spending, surely a critical ingredient in any plan to reduce the role of government in everyone's life? In 1980, the last year of free-spending Jimmy Carter the federal government spent $591 billion. In 1986, the last recorded year of the Reagan administration, the federal government spent $990 billion, an increase of 68%. Whatever this is, it is emphatically not reducing government expenditures. Sophisticated economists say that these absolute numbers are an unfair comparison, that we should compare federal spending in these two years as percentage of gross national product. But this strikes me as unfair in the opposite direction, because the greater the amount of inflation generated by the federal government, the higher will be the GNP. We might then be complimenting the government on a lower percentage of spending achieved by the government's generating inflation by creating more money. A better comparison would be percentage of federal spending to net private product, that is, production of the private sector. So even using percentages, the Reagan administration has brought us a substantial increase in government spending. Also, the excuse cannot be used that Congress massively increased Reagan's budget proposals. On the contrary, there was never much difference between Reagan's and Congress's budgets, and despite propaganda to the contrary, Reagan never proposed a cut in the total budget. The next, and admittedly the most embarrassing, failure of Reaganomic goals is the deficit. Jimmy Carter habitually ran deficits of $40-50 billion and, by the end, up to $74 billion; but by 1984, when Reagan had promised to achieve a balanced budget, the deficit had settled down comfortably to about $200 billion, a level that seems to be permanent, despite desperate attempts to cook the figures in one-shot reductions. This is by far the largest budget deficit in American history. It is true that the $50 billion deficits in World War II were a much higher percentage of the GNP; but the point is that that was a temporary, one-shot situation, the product of war finance. and the current federal deficits now seem to be a recent, but still permanent part of the American heritage. One of the most curious, and least edifying, sights in the Reagan era was to see the Reaganites completely change their tune of a lifetime. At the very beginning of the Reagan administration, the conservative Republicans in the House of Representatives, convinced that deficits would disappear immediately, received a terrific shock when they were asked by the Reagan administration to vote for the usual annual in crease in the statutory debt limit. These Republicans, some literally with tears in their eyes, protested that never in their lives had they voted for an increase in the national debt limit, but they were doing it just this one time because they "trusted Ronald Reagan" to balance the budget from then on. The rest, alas, is history, and the conservative Republicans never saw fit to cry again. Instead, they found themselves adjusting rather easily to the new era of huge permanent deficits. The Gramm-Rudman law, allegedly designed to eradicate deficits in a few years, has now unsurprisingly bogged down in enduring confusion. Reaganomics has been an uneasy and shifting coalition of several clashing schools of economic thought. In particular, the leading schools have been the conservative Keynesians, the Milton Friedman monetarists, and the supply-siders. Even less edifying is the spectre of Reaganomists who had inveighed against deficits--that legacy of Keynesianism--for decades. Soon Reaganite economists, especially those staffing economic posts in the executive and legislative branches, found that deficits really weren't so bad after all. Ingenious models were devised claiming to prove that there really isn't any deficit. Bill Niskanen, of the Reagan Council of Economic Advisors, came up with perhaps the most ingenious discovery: that there is no reason to worry about government deficits, since they are balanced by the growth in value of government assets. Well, hooray, but it is rather strange to see economists whose alleged goal is a drastic reduction in the role of government cheering for ever greater growth in government assets. Moreover, the size of government assets is really beside the point. It would only be of interest if the federal government were just another private business firm, about to go into liquidation, and whose debtors could then be satisfied by a parceling out of its hefty assets. there is no chance, for example, of an institution ever going into bankruptcy or liquidation that has the legal right to print whatever money it needs to get itself--and anyone else it favors--out of any financial hole. There has also been a fervent revival of the old left-Keynesian idea that "deficits don't matter, anyway." Deficits are stimulating, we can "grow ourselves out of deficits," etc. The most interesting, though predictable, twist was that of the supply-siders, who, led by Professor Arthur Laffer and his famous "curve," had promised that if income tax rates were cut, investment and production would be so stimulated that a fall in tax rates would increase tax revenue and balance the budget. When the budget was most emphatically not bal anced, and deficits instead got worse, the supply-siders threw Laffer overboard as the scapegoat, claiming that Laffer was an extremist, and the only propounder of his famous curve. The supply-siders then retreated to their current, fall-back position, which is quite frankly Keynesian; namely deficits don't matter anyway, so let's have cheap money and deficits; About the only Keynesian phrase we have not heard yet from Reaganomists is that the national debt "doesn't matter because we owe it to ourselves," and I am waiting for some supply-sider to adopt this famous 1930s phrase of Abba Lerner without, of course, bothering about attribution. One way in which Ronald Reagan has tried to seize the moral high road on the deficit question is to divorce his rhetoric from reality even more sharply than usual. Thus, the proposer of the biggest deficits in American history has been calling vehemently for a Constitutional amendment to require a balanced budget. In that way, Reagan can lead the way toward permanent $200 billion deficits, while basking in the virtue of proposing a balanced budget amendment, and trying to make Congress the fall guy for our deficit economy. Even in the unlikely event that the balanced budget amendment should ever pass, it would be ludicrous in its lack of effect. In the first place, Congress can ove... |
| www.nationalcenter.org/WCT010804.html Faced with what seems to be an increasing level of misleading rhetoric about conservative positions on public policy issues, The National Center for Public Policy Research has resolved to help bridge the gap between rhetoric and reality. Disclaimer: We freely acknowledge that not all conservatives share every view related as "what conservatives think," nor does every speaker of what our editors perceive to be a left-wing comment think of themselves as "liberal." However, unanimity is impossible on questions such as these. We therefore offer our best judgment, and offer apologies to anyone who believes we could have done better. Photo of Valley Forge National Historic Park by James Lemass Reaganomics: Were the 1980s the Decade of Greed? The Left Says: "The 1980s were "a time of Reaganomics, burgeoning yuppies, and the Decade of Greed." What Conservatives Think: Conservatives think it is odd that economic growth when a conservative is president is called "greed," while economic growth when a liberal is president is called "prosperity." Nonetheless, here are facts about the 1980s: From 1982 through 1989, the years President Reagan's economic policies were in effect, corporate contributions to charities grew an average of 10 percent per year, outstripping inflation by over 6 percent. Throughout the 1980s, the average income of all economic segments of the American population rose: the poorest fifth by 104 percent, the second poorest fifth by 95 percent, the middle fifth by 117 percent, the second-wealthiest fifth by 122 percent and the top fifth by 136 percent. Reagan's tax cuts did not enrich the wealthy at the expense of the poor. Federal income taxes fell by 9 percent for the top fifth, by about 10 percent for the middle three-fifths, and by 275 percent for the bottom fifth (amount is over 100 percent for illustrative purposes -- many poor families not only were excused from liability for all federal taxes, but received federal funds through an expansion of the Earned Income Tax Credit). Between the fourth quarter of 1982 and the fourth quarter of 1988, 167 million new jobs were created. Unemployment rates for blacks and Hispanics in 1989 were 114 percent and 8 percent respectively, down from 204 percent and 153 percent at the end of 1982. Between 1982 and 1990, black unemployment dropped by 9 percentage points and Hispanic unemployment by 73 percentage points while white unemployment dropped by 49 percentage points. Between 1982 and 1987, the number of black-owned business firms increased by 38 percent, while the number of firms in the US in total rose by 14 percent. Receipts by black-owned firms rose 105 percent during 1982-87, while the average inflation rate was 4 percent per annum. |