Run an extra 4% of GDP deficit and--if you push the social marginal product of investment up to 15% via taxes, labor rents, and spillovers--you can say that Reaganomics costs you 0.6% per year in economic growth, which over 15 years leaves you with a country 9% poorer than it would otherwise have been.The 'feel good' Morning-in-America Reagan left a legacy: poorer Americans. You don't hear Republicans admitting this. But oddly, you don't hear Democrats pointing this out. Reagan has had some kind of voodoo spell on America and it still hasn't be dispelled.
If you want to supercharge it, you can then say that the infotech revolution required that everybody have invested a certain amount in high-tech in order for Intel and company to learn-by-doing, and get bigger numbers.
And you can super-supercharge it by pointing to income and wealth inequality as well--where Reagan does leave a bunch of fingerprints--and take median wages rather than productivity as your principal outcome variable.
Take these together, and add the appropriate grains of salt, and I am happy saying that Reagan and George W. Bush cost the average worker somewhere between 5 and 10% of his or her wages as of 1994 or so.
Sunday, November 15, 2009
The Legacy of Reagan
In his blog, Brad DeLong attempts a calculation of the effects of Reagan's policies on the average American worker:
Subscribe to:
Post Comments (Atom)
2 comments:
I am not sure when I lost the voodoo spell; at inauguration? The way they acted toward the Carters? I know that I knew he was wrong during 1982 when it was revealed that the overspending had to stop and that the budget had to be balanced and a half hearted attempt was made to do that...
It is hard to understand people in this day and age worshipping Reagan (one of our worst presidents, ever).
By the way; I have the book you recommended and I really can't wait to get started on it.
Thomas: I hope the book turns out as good as the reviews said it would be. Right now I'm working my way through the book "A Terrible Beauty" by Peter Watson. It's an intellectual history of the 20th century. It's a fun way to be reminded of all the great ideas and thinkers of that century. But as a review it isn't giving me any new insights. Hopefully the Reagan book will give you new insights -- both positive & negative -- into that administration.
Post a Comment