Whitewashing History

Here's an interesting bit from a post by Paul Krugman in his NY Times blog:

...there were two major tax changes in Reagan’s first term, which began in January 1981. ERTA, aka the Reagan tax cut, was signed in August 1981; TEFRA, which raised taxes, was signed in September 1982.

Here’s how those tax law changes relate to the unemployment rate:


So unemployment, which had been stable until Reagan cut taxes, soared during the 15 months that followed the tax cut; it didn’t start falling until Reagan backtracked and raised taxes.

Of course, I don’t believe that correlation was causation: in fact, both job losses in 1981-2 and job gains thereafter were mainly the result of Federal Reserve policy, rather than tax changes. (I have a private bet here: despite this disclaimer, I’m almost certain that some commenters and/or writers on other blogs will accuse me of slandering Reagan, claiming that the 1981 tax cut caused the recession). The point, instead, is to highlight just how long the lag was between those tax cuts and “morning in America”.

It is funny how the ideologues paint Reagan's presidency as one great surge after Carter's tough four years. But that is misremembered history. Much like Rudy Guiliani's astonishing claim that there were no terrorist attacks during George Bush's presidency (oops! forgot that 9/11 attack, forgot the shoe bomber, forgot the Ft Dix plotters, etc.). Ideologues have an interesting habit of whitewashing history to match their prejudices.