Thursday, June 10, 2004
Not surprised: New York Times
talentless hack columnist Paul Krugman continues his crusade minimize Reagan's legacy and trash his own economic credentials a column at a time. I'll let Don Luskin and others pick apart Krugman's economics, but one juxtaposition in Krugman's column demonstrated that Krugman is only interested in making partisan points.
The architect of America's great disinflation was Paul Volcker, the Fed chairman. In fact, Mr. Volcker began the process in 1979, when he adopted the tight monetary policy that caused that record unemployment rate. He was also mainly responsible for the recovery that followed: it was his decision to loosen up on the money supply in the summer of 1982 that set the stage for the rebound a few months later.
There was, in short, nothing magical about the Reagan economy. The United States did, eventually, experience an economic miracle — but not until Bill Clinton's second term. Only then did the economy achieve a combination of rapid growth, low unemployment and quiescent inflation that confounded the conventional economic wisdom.
See, Reagan's not responsible for the '80s economy (not that Krugman was pleased with the economy then anyway), the chairman of the federal reserve is responsible. Yet the economic miracle (and tech bubble?) is associated with Bill Clinton -- not Alan Greenspan.
Krugman's column has a plethora of other problems: a suggestion that tax hikes spur economic growth; that 7.5 percent unemployment is "very high" (Krugman's never given George W. Bush credit for the low unemployment rate -- relative to Reagan's); and that supply-siders promised a "sustained acceleration of economic growth" (forever? the economy would always grow faster and faster?).
Maybe it's a good thing that Krugman doesn't make corrections, he'd have a lot of work to do.