Reaganomics

The National Center for Public Policy Research has begun a series of briefs on "What Conservatives Think" in order to "help bridge the gap between rhetoric and reality." Yes, but in which way are they crossing the bridge? Consider their brief on Reaganomics. It begins, "here are facts about the 1980s" and almost immediately heads off the rails, "from 1982 through 1989, the years President Reagan's economic policies were in effect..." Hmmm, I thought we were going to get the facts about the 1980s? What happened to 1981-1982? Ah, Reagan's policies weren't in effect then - presumably these were the ghostly remains of the Carter years - but then logically Reagan's policies must have been in effect until at least 1991, right? Apparently not.

The truncation of the Reagan years lets the NCPPR compute statistics from the bottom of a recession to the top of a peak thereby confusing cyclical with permanent gains. Numbers should not be treated as tools for partisan games but it's especially galling here because the truth is in many ways more creditable to Reagan.

The 1982 recession was a result of Reagan's policy - the policy to support Paul Volcker in wringing inflation and inflationary expectations from the economy. The 82 recession was terrible but the alternative, another goosing of the money supply, higher inflation, and a delay but not an avoidance of the day of reckoning, would probably have been worse. During the recession Reagan's approval rating hit an all time low of just 35% but to his credit he stood firm. As a result, the economy fundamentally shifted from a high inflation/high unemployment economy to a low inflation/low unemployment economy. It was the recession of 1982 which laid the foundation for the next two decades of higher productivity and better economic policy.