I only recently came across the following diagram, so apologies if its been discussed before.
http://www.nytimes.com/interactive/2009/01/26/business/economy/20090126-recessions-graphic.html
If the Keynesian prescription for recessions is to cut taxes and increase spending, then by that definition Reagan was a Keynesian. And his policies worked. Yet Austrians argue that Keynesianism has never worked. But it did work for Reagan, didn’t it?
The New York Times is an interventionist newspaper. Do not be surprised that it produced interventionist articles and opinions.
The early 1980s recession was caused by high interest rates meant to stop inflation. Much spending in the 1960s and 1970s was paid for with newly printed money which meant rising prices. This became so bad that Federal Reserve Chairman Volcker hiked interest rates to stop the inflation. Once prices adjusted enough the economy improved, but the economy still suffered from government intervention in the form of the Savings & Loan Crisis.
There is no such thing as Reaganomics.
It was a mixture of Volckerite monetarism in early years, then a much looser heterodox monetarism for a brief while, then Arthur Laffer/Paul Craig Roberts style supply side economics, then neoclassical Keynesianism synthesis, and then some regressions to the prior four in different periods.
Reagan, stuck in Alzheimer dementia and speaking the words put in his mouth by Alexander Haig and others, was not so learned in economics that he had any idea that he was being fed entirely contradictory ideas from differing schools of thought. Reagan started life as a New Dealer and then changed his positions to suit his newfound Republican friends. Briefly, he may have been enthusiastic about economics in the 1960s, but by the time he went crazy, I doubt he remembered any of the economics he learnt.
I bet to you guys that Gerald Ford and Nelson Rockefeller knew more economics than he.
The story has it that reagan instituted a “pro-growth” tax system. Ideologically he is a supply sider. Which means less government , lower taxes, “stable currency”-ha and above all, the conviction that production leads to growth. Keynesianism, advocates deficit spending, stimulus in recession and a focus on consumption as the general thoery so poorly implies.
In my humble opinion “Reagonomics,” ie, fascism, is what happens when conservative right wing statists which identify with classical economics get in control of the state. (Hey, as you can see, left wing statists can be just as bad)
Even Mises basically said fascism was necessary to save europe from communism.
Whadya mean by fascism? That’s a strange equation.
I agree, however, keynesianism and “reaganomics”- essentially supply siders, isnt it all fascism ie, “strength through unity”?- Haha.
This is your worst moment, Laotzu.
Specifically, in relation to the recession, Reagan cut taxes and increased spending. Isn’t that Keynesian?
lol
We shouldn’t even reveal to him how Mussolini’s industrial policy actually worked.
I would say that Reganomics is a type of Chicagoian neoclassical economics… I think Reaganomics is exactly the type of econ that most Chicagoians call for when they talk about government’s role in the economy. The main economist that contributed to reganomics was William Niskanen… I think it is the current economic policy that most tea partyers agree to as well, ( cut spend except for military spending!) Yes Keynesians call for reduction of taxes during a recession, but I think Reganomics call for a reduction of taxes in general, whether it is during a recession or a period of economic growth. Keynesians also call for more government spending during times of recession but Reaganomics calls for less spending..
As Niskanen points out, Reaganomics was put in place to
1, reduce government spending 2, reduce marginal tax rates on income 3, reduce regulation 4, reduce inflation by controling the money supply..
The first point might be misleading because while they said they wanted to cut govrnment spending, they really meant cut spending except for military spending. Nevertheless, the overall spending of government would be less.
the second point and third point were put in place because Reagan did want the economy to grow through private sectors more than public.
the fourth point is the point that was a very Chicagoian influence… As Friedman claimed, the reason why the great recession occured was because the Fed failed to regulate the money supply to control inflation…
while I disagree with the whole Reaganomics = fascism, I can see why Laotzu del Zinn might think so because Reaganomics was big on expressing the role on the military. Remember, in the 80s, America was all about the war against communism.
Mussollini called fascism the merger of the corporation and the state. I am using that broad definition here. Perhaps I should have said “ie, american fascism,” or corporatism/corporatocracy.
Besides Reagan’s heavy merging of corporation and state, his regime was very anti-expression, pro military, and imperialistic. It relied on conservative values and the suppression of minorities.
It’s different than Italian and German fascism, sure. But it’s fascism none-the-less. You can leave all your leftover republican bias for Reagen, the murderer, at the door.
bit of background: http://mises.org/daily/1544 by Rothbard on Reaganomics.
When did you stop beating your wife?
That’s the fallacy you make here, as Aristotle would have put it. You make an assumption that I have any Republican bias or Reagan bias in the first place, even though I am not even American. Wouldn’t you need to have a wife in the first place, before you decided to beat a spouse?
The following is whatever I remember from Tony Judt’s Postwar and von Mises’ Omnipotent Government. Yes, these are still limited sources.
First of all, Mussolini was not nearly as close to being anti-expression as many modern dictators or even democratically elected leaders today. Benedetto Croce was allowed to write and publish dissident works freely in his regime with not one word censored. So were other outright Communist anti-Fascist writers, who wrote even for mainstream publishing houses. In cases of those who did modify expression to favor the regime, Luschino Visconti and fellow Communist filmmakers made pro-Fascist cinema as a choice, because they did not want to draw attention as polemics and because they wanted a little state patronage, although they moved back to Communist-themed cinema afterwards. Young Mussolini was a newspaper editor and detested censorship then, although as a ruler, he must have remembered how weak and ineffectual journalism is at political change and how censorship doesn’t even matter. Free speech is not necessarily a problem for authoritarian rulers, who can have dissident people channel their anger in public rather than in government. They don’t become any less impotent by babbling. In a democracy such as the US, however, you had a culture czar appointed in the very progressive Kennedy era to clean up the “vast wasteland” of television.
Second of all, Fascism never existed in Germany, and the NSDAP’s programs had entirely different working schemes from Mussolini’s. Mussolini had borrowed heavily from the ideas of Economia Corporativa of Italian economists much before his own regime, and those Italian economists had borrowed heavily from the ideas of a Guild-based Commonwealth envisioned by Sidney and Beatrice Webb. Economia Corporativa was merely a connection of bureaucracy to every single daily activity, and thus incorporating all organizations into one single super-entity of economic activity. Hitler, on the other hand, merely continued a policy already in place in Germany, with the government controlling every single price, every single distribution of goods, every single allocation of capital, every single payment of wages, and every single allocation of workers until prices, wages, and interest rates were nominal figures. Both ideas had different sources and different implementations. Fascism and “Nazism” (as NSDAP programs were known) are quite different.
Thirdly, there is no such thing as Reaganomics. It was a mixture of five differing schools of thought put into an ill conceived hybrid by many advisors and top officials. One involved lowering tax rates and increasing government spending. One involved strictly controlling the money supply, until an artificial recession was created to end the stagflation era. One involved then using inflation to push people into higher tax brackets after the first attempt at lowering tax rates failed miserably. One involved a return to Eisenhower’s Keynesian automatic stabilizers just in case all these new tricks failed. And so on. What is the difference? All these are merely interventionist measures. Hitler and Mussolini could have simply ordered a recession to be “over” by forcing businesses to hire, forcing prices down, forcing factories to produce more of one thing, all by a simple decree. US did not have such powers and had to tip toe around them by messing with the money supply, tax rates, and fiscal policy. American economic systems do not even closely resemble Fascism or NSDAP’s economic controls.
But alas, what do facts matter next to the sublime idiocy of a conspiracy theory?
Yes, because I claimed any conspiracy theory.
I don’t recall bringing Hitler up at all.
Regardless of their inspirations, they shared an authoritarian nature, conservative values, and corporate interests. We can call it corporatism, of which fascism is an Italian version. Fine. But most people know what is meant when i say it is fascism. Government/corporate marriage.
But it was informative, I’ll give you that
Prateek, if you don’t mind my asking, where are you from? Also, I’m not really understanding how you’re differentiating between Nazism and Fascism. It seems to me that you’re contrasting them based on their causes rather than their effects. If two flash lights point at the same spot, don’t the two beams become one at some point? So, how exactly has Germany not experienced fascism?
Perhaps if you trace the word to its etymological root, but I’m not quite sure that argument is applicable here: