Infowars.com
December 20, 2010
I admire Robert Reich, because he has a social conscience. However, if I were writing about the current Republican/Obama tax cut, I would not help the Republicans put Ronald Reagan's name on it. Outside of progressive circles, which reflexively blame Reagan, the 40th president is still popular, because the 1980s were the last of the good times. Who prefers 21st century America to the Reagan 1980s?
In his recent article "Reaganomics Redux" in Reader Supported News (17 December), Reich writes that "Ronald Reagan came to Washington intent on reducing taxes on the wealthy and shrinking every aspect of government except defense." As Reagan's first Assistant Secretary of the Treasury for Economic Policy, often labeled both in praise and derision "the father of Reaganomics," I would like to offer a different perspective.
Reagan came to Washington to put an end to stagflation and the cold war. Keynesian demand management had the wrong policy mix. Easy money pumped up aggregate demand, but high tax rates reduced the response of supply to demand. Consequently, prices rose. The problem was reflected in worsening "Phillips curve" tradeoffs between inflation and employment. As time passed, higher rates of unemployment were required to bring down inflation, and higher rates of inflation were required to boost employment.
