Friday, January 16, 2015

The Truth About Ronald Reagan Fanboys

A battle between Ronald Reagan fanboy and WaPo columnist Robert Samuelson and NYT's Paul Krugman has forced to the surface some truth about Ronald Reagan.

First, Krugman is correct when he writes:
[T]he great disinflation of the 1980s was basically a story of a Fed-imposed recession, and had little if anything to do with Reagan’s supply-side tax cuts.

Brad DeLong then did a solid job backing up Krugman. Here's Krugman with a blow-by-blow analysis:
 Now Brad DeLong weighs in with some contemporary press reports, which suggest that far from offering Volcker enthusiastic backing, at least some Reagan officials were putting pressure on the Fed to loosen up. As best I can tell both from the record and from my own recollections, the Reagan administration was in fact a house divided on monetary policy, containing at least three factions: hard-line monetarists, supply-siders who didn’t believe that the demand side mattered in any case, and, yes, people who wanted to pressure Volcker into easing up. Not the story Samuelson tells, but in any case the main point should be that Reaganomics per se had nothing to do with it.
Yet Samuelson is angry about something; indeed declared himself “maddened” by a column whose economic analysis he doesn’t actually dispute. What’s going on here?
The answer, I think, is Reaganolatry. Specific policies aside, Reagan must be seen as the hero who saved America. And therefore he must be given credit for a disinflation carried out by a Fed chairman who was appointed by, and began his anti-inflation crusade under, Jimmy Carter. Anything perceived as detracting from the Reagan legend is infuriating, even if you can’t find anything wrong with the substance.

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