Sunday’s New York Times features this terrific column by Nobel-prize winning economist and Princeton professor Paul Krugman who speculates on why Reaganism’s economic promise is a documented failure but still lives on in Conservative strongholds in Congress and State Legislatures.
From the column:
First of all, even before the current crisis Reaganomics had failed to deliver what it promised. Remember how lower taxes on high incomes and deregulation that unleashed the â€œmagic of the marketplaceâ€ were supposed to lead to dramatically better outcomes for everyone? Well, it didnâ€™t happen.
more after the jump:
To be sure, the wealthy benefited enormously: the real incomes of the top .01 percent of Americans rose sevenfold between 1980 and 2007. But the real income of the median family rose only 22 percent, less than a third its growth over the previous 27 years.
Moreover, most of whatever gains ordinary Americans achieved came during the Clinton years. President George W. Bush, who had the distinction of being the first Reaganite president to also have a fully Republican Congress, also had the distinction of presiding over the first administration since Herbert Hoover in which the typical family failed to see any significant income gains.
And then thereâ€™s the small matter of the worst recession since the 1930s.
Thereâ€™s a lot to be said about the financial disaster of the last two years, but the short version is simple: politicians in the thrall of Reaganite ideology dismantled the New Deal regulations that had prevented banking crises for half a century, believing that financial markets could take care of themselves. The effect was to make the financial system vulnerable to a 1930s-style crisis â€” and the crisis came.
Now I’m sure the freepers over at Red County and the Register are going to argue otherwise, but how many Nobel Prizes in economics do they have compared with Krugman?