Carpe Diem

Ronald Reagan, the first sitting US president to visit the NYSE, on ‘believing in the miracle of the marketplace’

Reagan

Today, February 6, is President Ronald Reagan’ birthday, he was born on this day in 1911. Shortly after his death on June 5, 2004, the New York Stock Exchange put this tribute to the 40th president of the United States on its website:

On March 28, 1985, President Ronald Reagan made his first of two visits to the NYSE to salute the robust American expansion, as well as the central role of the New York Stock Exchange as the nerve center of entrepreneurial capitalism (see photo above).  President Reagan was the first sitting U.S. president to visit the NYSE.

At 9:53 a.m. that morning, President Reagan—amid a roaring ovation—addressed the Exchange community from the bell podium.  Flanked by his chief of staff, Donald T. Regan and NYSE chairman and CEO John J. Phelan, Jr., President Reagan proclaimed: “We’re bullish on the American Economy.  The American Economy is like a race horse that’s begun to gallop in front of the field.”  Aiming to drive “the bears back into hibernation,” he said, “that’s our economic program for the next four years—we’re going to turn the bull loose.”

Throughout his presidency, the President continued to champion the principles and power of free people competing in free markets.  During the first year of his Administration, in September 1981, Reagan communicated his core beliefs to members of the IMF and the World Bank when he stated:

“We who live in free market societies believe that growth, prosperity and, ultimately, human fulfillment are created from the bottom up, not the government down. Only when the human spirit is allowed to invent and create, only when individuals are given a personal stake in deciding economic policies and benefiting from their success – only then can societies remain alive, dynamic, prosperous, progressive and free.

“Trust the people. This is the one irrefutable lesson of the entire post-war period, contradicting the notion that rigid government controls are essential to economic development. The societies that have achieved the most spectacular, broad-based progress are neither the most tightly controlled, nor the biggest in size, nor the wealthiest in natural resources. No, what unites them all is their willingness to believe in the magic of the marketplace.”

60 thoughts on “Ronald Reagan, the first sitting US president to visit the NYSE, on ‘believing in the miracle of the marketplace’

  1. What a distance we have come from 1980 – from a President who believed in the magic of the market place and the power of the people to create, innovate – to a President in 2012 who believes that everything good comes from the benevolence of the Government – and increasing the control of Government over the people. The economy took off in 1981/82 – longest peace time expansion ever – and the economy remains mired in the doldrums in 2012 even though we have been out of the recession since 2009. To the class and wealth warriors in today’s Government, the days of the Reagan expansion and growth look evil – because we grew our economy, helped grow the world economy – we became stronger and indeed regained the SuperPower status. There is no doubt that almost no one admires our economic power in 2012 (they do enjoy watching us decay) – they did envy us in the 1980′s, our ability to create and grow. Sad indeed.

    • What’s sad is your placing this all the feet of the current administration. The morass we find ourselves in has been pushed along by previous administrations – both Democrat and Republican.

      We can’t get off this “it’s the left/right to blame”
      meme soon enough.

      • We can’t get off this “it’s the left/right to blame”
        meme soon enough.

        Why? Both parties are responsible. Both should be cast aside in favour of better ideas and smaller government.

          • You are right that both sides are to blame. But the partisans on either side of the debate can only see the errors of their opponents and lack the courage to look into the mirror and see that their side is equally to blame and equally stupid/evil/incompetnet.

          • No argument here. Bush got us mired in two trillion dollar wars and Obama seems content to double-down. Complete idiocy. I think we could find a place for that cash these days.

          • “Bush got us mired in two trillion dollar wars and Obama seems content to double-down.” — Moe

            I guess that you missed that little event on 9/11/01?

          • I guess that you missed that little event on 9/11/01?

            Not at all. That event was pulled off mostly by Saudis who belonged to an organization that was funded, armed, and trained by the CIA. It had nothing to do with Iraq. Yet the Bush clowns made up fake intelligence and used it to convince the UN that Saddam was a bad guy. As a result Iraq was invaded and thousands of innocent people were killed needlessly as the US military did what it could to bring Iraq’s secular government under Iranian control.

          • “That event was pulled off mostly by Saudis who belonged to an organization that was funded, armed, and trained by the CIA. It had nothing to do with Iraq. Yet the Bush clowns made up fake intelligence and used it to convince the UN that Saddam was a bad guy. As a result Iraq was invaded and thousands of innocent people were killed needlessly as the US military did what it could to bring Iraq’s secular government under Iranian control.”

            Vange, which media outlet would you say gives you the most information about US foreign policy: Al Jazeera, Institute for Policy Studies, or Russia Today?

          • Vange, which media outlet would you say gives you the most information about US foreign policy: Al Jazeera, Institute for Policy Studies, or Russia Today?

            I prefer to pay attention to what players like Brzezinski, Secretary Clinton, Bob Gates, and others have had to say.

            MSNBC, ABC, BBC, Fox, and CNN have noted that most of the attackers were Saudis, not Afghans or Iraqis and that the US trained, funded, and armed bin-Laden’s group to fight the Russians in Afghanistan. Foreign Affairs has written about the unintended consequences of the American policies in Afghanistan during the 1980s and 1990s.

            CNN…The United States is taking steps to determine how it received erroneous intelligence that deposed Iraqi leader Saddam Hussein was developing and stockpiling nuclear, chemical and biological weapons, White House spokesman Scott McClellan said Wednesday.

            I could go on but I find that it is a waste of time to try to shed light on matters as they were because one side is already convinced and the other has a belief system that will never allow it look at the objective data. The facts on this are clear. The US and European nations have a long history of meddling in Central Asia, the Middle East and other areas of the world. That meddling usually came back to create many unintended consequences. The CIA never meant to have a fool like bin Laden rise to prominence but when it was pushing funding into Pakistan to anti-Soviet groups it permitted him and his group to learn skills that were hard to acquire, get funding, and get weapons that would be difficult to find. Those programs helped give you 9/11 and led to the deaths of so many innocent people just as the needless invasion of Iraq will lead to unimagined unintended consequences. For a person who does not believe in the initiation of violence that is a very disturbing problem that has to be dealt with. But as long as the government keeps growing and power hungry fools who see nothing wrong with violence against innocents we are going to see plenty of blowback coming our way.

          • “That event was pulled off mostly by Saudis who belonged to an organization that was funded, armed, and trained by the CIA …Yet the Bush clowns made up fake intelligence and used it to convince the UN that Saddam was a bad guy.” — Vag

            You really are a tiresome, uninformed fool. Read this article from the Washington Post. That way, the next time you write this nonsense there will be no excuse, you will simply be a liar.

            ‘Bush Lied’? If Only It Were That Simple, Washington Post

            As for the Saudis that we supposedly financed and trained, that is another lie. The Saudis who took up the fight against the Soviets in Afghanistan did so on their own initiative and were self-financed.

            Get your head out of Chomsky’s ass.

          • You really are a tiresome, uninformed fool. Read this article from the Washington Post. That way, the next time you write this nonsense there will be no excuse, you will simply be a liar.

            ‘Bush Lied’? If Only It Were That Simple, Washington Post

            The WP supported the war from the beginning. It is not a surprise that it finds it difficult to admit its error. The facts are what they are. You cannot do away with them because they are inconvenient.

  2. Rhetoric matters when it comes from the President. It expresses our national identity and what we believe in. What better value is there than freedom?

    Our current President would have us believe that if only the constraints placed upon us by the greed and avarice of the wealthy and powerful were tempered or removed by higher taxation and greater regulation we would be free to pursue our dreams. How a negative will motivate and inspire is beyond me. It is the words that make soaring speeches not the cadance of their delivery.

    • Your president is trying to inspire you to become a dependent of the power-hungry dregs in the Potomac Swamp. He wants you to dream small and put your faith in smarmy politicians to deliver on them. He wants you to focus your energies on hating his enemies (anyone who is self-motivated and creative) so that you never realize that it is you who is losing.

      And America voted for this thing twice. Welcome to your new country.

      • Your president is trying to inspire you to become a dependent of the power-hungry dregs in the Potomac Swamp. He wants you to dream small and put your faith in smarmy politicians to deliver on them. He wants you to focus your energies on hating his enemies (anyone who is self-motivated and creative) so that you never realize that it is you who is losing.

        And America voted for this thing twice. Welcome to your new country.

        First of all, Obama might be a terrible president but he is no more terrible than Bush was. Second, neither Mitt Romney nor John McCain were sensible enough, moral enough, or capable enough to be president. The fault lies not with the voters but with the leadership in the GOP and its mouthpieces in the press. As long as they ensure that their chosen candidate is a war lover who has no principles the voters will continue to reject that candidate.

        • Moot point, Vangel. I’ve never seen a candidate whom I’d entrust with this much power. Nobody qualifies. And nobody who would come close to qualifying would ever lower himself into the rotted muck of politics. Of all the candidates you mention, Obama is still the the worst of them (disgusting as they all are). Americans voted in the worst option twice.

          • Of all the candidates you mention, Obama is still the the worst of them (disgusting as they all are). Americans voted in the worst option twice.

            It was not Obama that lied you into an unnecessary war in Iraq. It was not Obama who first denied individuals their rights to a speedy and fair trial. It was not Obama who pushed for the Patriot Act, warrantless spying, etc. Obama is one of the worst presidents ever but he still has a while to go before he is as bad as Bush. What gets to me is that the two candidates that were run against him were such idiots and such evil warmongers. The GOP seems to have forgotten that the public prefers peace to war and has been captured by the neoconservatives who are not disturbed when government grows bigger and citizens become less free because they favour such developments.

          • You don’t seem to understand 3 things:

            1.) I am not commenting on the GOP.

            2.) The fact that Obama was not in a position to commit those crimes does not mean that it wasn’t obvious that he would be even worse (and he is)

            3.) Obama has never run against Bush. Neither you nor Obama seem to understand that.

          • You don’t seem to understand 3 things:

            1.) I am not commenting on the GOP.

            I am. My point is that the GOP has supported the growth of government and increased spending on the warfare state while it has tried to pass itself off as fiscally prudent.

            2.) The fact that Obama was not in a position to commit those crimes does not mean that it wasn’t obvious that he would be even worse (and he is)

            This is a hypothetical. Would Obama have lied the country into a war in Iraq? Perhaps but we will never really know. But we know that Bush lied the country into war. That makes him worse.

            3.) Obama has never run against Bush. Neither you nor Obama seem to understand that.

            I never said that he ran against Bush. I said that he ran against two morally bankrupt losers, which is why he won.

          • “Obama is still the the worst of them (disgusting as they all are). Americans voted in the worst option twice.”

            That’s because the real villains are the corrupt, low information voters.

            “I do not believe that the solution to our problem is simply to elect the right people. The important thing is to establish a political climate of opinion which will make it politically profitable for the wrong people to do the right thing. Unless it is politically profitable for the wrong people to do the right thing, the right people will not do the right thing either, or it they try, they will shortly be out of office.”
            ~Milton Friedman

          • “It was not Obama that lied you into an unnecessary war in Iraq.” — Vag

            More of your ignorant Chomskyite shit.

          • “But we know that Bush lied the country into war. That makes him worse.”

            No, we don’t. We do, however, know you’re a typical Ron Paul crackpot.

          • No, we don’t. We do, however, know you’re a typical Ron Paul crackpot.

            Sure we do. The intelligence was wrong and the war was totally unnecessary. Dr. Paul, the crackpot, was right all along.

          • Would Obama have lied the country into a war in Iraq?

            No. Obama would have lied to force Obamacare on us, get us into a war in Libya (which he will then lie about), launch a drone war on innocent Pakistanis and justify his right to murder U.S. citizens. I can see why you think Barack Ilyich Obama is so much better.

    • You are confusing rhetoric with “political” rhetoric – two different animals.

      …and the president before Obama had us believe weapons of mass destruction existed in Iraq and Osama was worth hunting down no matter the inconvenience or cost – which we are STILL paying to the tune of several TRILLIONS and counting. So, who gives a flying crap who was better or worse – is there a contest with a reward somewhere???

      • Actually, moron, the case for WMD in Iraq was made by the U.N. and the Clinton administration while Bush was still Governor of Texas. And our troops did, in fact, find and destroy thousands of tons of chemical precursors as well as dismantling Sadam’s intellectual infrastructure. Fear of similar treatment led Muammar Gaddafi to abandon a nuclear program that no one was aware that he had, leading to the break-up of the AQ Khan’s nuclear proliferation network. But, hey, don’t let facts get in the way of an ignorant rant.

        As for spending “TRILLIONS and counting”, if you are going to pull numbers out of your ass, why not HUNDREDS OF TRILLIONS?

          • “Trillions source: look it up lazy-ass” — Schmoe

            Why would anyone waste their time looking for evidence to support your ignorant leftist drivel?

        • Actually, moron, the case for WMD in Iraq was made by the U.N. and the Clinton administration while Bush was still Governor of Texas.

          That debate was about Saddam’s use of weapons against the Iranians when he was on your side, and had nothing to do with the 9/11 attacks and its aftermath. The chemical weapons used against the Iranians were given to him by American intermediaries because he was fighting a proxy war against an American enemy, Iran.

          And our troops did, in fact, find and destroy thousands of tons of chemical precursors as well as dismantling Sadam’s intellectual infrastructure.

          No they didn’t. Even Bush admitted that there were no WMDs in Iraq and that Iraq had nothing to do with 9/11. You might want to start paying attention.

          • “Russian President Vladimir Putin says that after the 9/11 attacks Moscow warned Washington that Saddam Hussein was planning attacks on the US.

            He said Russia’s secret service had information on more than one occasion that Iraq was preparing acts of terror in the US and its facilities worldwide. …

            “After the events of 11 September 2001, and before the start of the military operation in Iraq, Russian special services several times received such information and passed it on to their American colleagues,” he told reporters.

            He said the information received by Russian intelligence suggested Iraq was planning attacks in the United States, “and beyond its borders on American military and civilian targets”. — BBC

            “No one in my administration has ever suggested that Iraq had anything to do with 9/11 …The lesson of 9/11 was to address threats before anything happens” — George W Bush, from your clip

            It really doesn’t matter if Saddam was involved in the 9/11 attacks. In the aftermath of 9/11, Putin informs Bush that Iraq has plans to attack the U.S. at home and abroad. It’s important to note that the Russians had a very close relationship with Saddam and that the KGB was intimately involved with Iraqi intelligence.

            Given Saddam’s proven involvement in the 1994 World Trade Center bombing, Iraq must be considered a real and material threat.

            There is no way that Bush could have let this threat go unchallenged. If he had, and there was an attack, he would have been impeached.

            Once again, it’s you who needs to start paying attention.

          • It really doesn’t matter if Saddam was involved in the 9/11 attacks.

            But it does because he was implicated in the attacks by Bush and his band of liars.

            In the aftermath of 9/11, Putin informs Bush that Iraq has plans to attack the U.S. at home and abroad.

            Putin knows that his country was pushed over the edge by a useless war. It could be that he wanted the US to be weakened relatively to Russia by telling Bush what he wanted to hear. But talk is cheap because anyone can say anything. What matters is the evidence and none of it was sufficient to justify the worthless war that turned over secular Iraq to the Iranian regime.

            There is no way that Bush could have let this threat go unchallenged. If he had, and there was an attack, he would have been impeached.

            He did let it go unchallenged. The real enemy, if you want to say that there is one, is the Saudi religious regime that exported extremism, not a secular Iraq. The fact that you cannot look at the evidence and see for what it is shows that you are just one of those ideological zealot that we see on both the far right and the far left. And as long as fools like you have influence on the GOP it will continue to decay into irrelevancy. Putin should take a bow because he did his job well.

          • “The chemical weapons used against the Iranians were given to him by American intermediaries because he was fighting a proxy war against an American enemy, Iran.” — Vag

            You’re a lying sack of shit. Prove it.

          • “That debate was about Saddam’s use of weapons against the Iranians when he was on your side …” — Vag

            “He will use those weapons of mass destruction again, as he has ten times since 1983.” – Sandy Berger, Clinton National Security Adviser, Feb, 18, 1998

            “One way or the other, we are determined to deny Iraq the capacity to develop weapons of mass destruction and the missiles to deliver them. That is our bottom line.” – President Bill Clinton, Feb. 4, 1998

            “If Saddam rejects peace and we have to use force, our purpose is clear. We want to seriously diminish the threat posed by Iraq’s weapons of mass destruction program.” – President Bill Clinton, Feb. 17, 1998

            “Iraq is a long way from here, but what happens there matters a great deal here. For the risks that the leaders of a rogue state will use nuclear, chemical or biological weapons against us or our allies is the greatest security threat we face.” – Madeline Albright, Clinton Secretary of State, Feb 18, 1998

            “We urge you, after consulting with Congress, and consistent with the U.S. Constitution and laws, to take necessary actions (including, if appropriate, air and missile strikes on suspect Iraqi sites) to respond effectively to the threat posed by Iraq’s refusal to end its weapons of mass destruction programs.” – Letter to President Clinton signed by Democratic Senators Carl Levin, Tom Daschle, John Kerry and others, Oct. 9, 1998

            “Saddam Hussein has been engaged in the development of weapons of mass destruction technology which is a threat to countries in the region and he has made a mockery of the weapons inspection process.” – Rep. Nancy Pelosi (D, CA), Dec. 16, 1998

            “There is no doubt that Saddam Hussein has reinvigorated his weapons programs. Reports indicate that biological, chemical and nuclear programs continue apace and may be back to pre-Gulf War status. In addition, Saddam continues to redefine delivery systems and is doubtless using the cover of a licit missile program to develop longer-range missiles that will threaten the United States and our allies.” – Letter to President Bush signed by Sen. Bob Graham (D, FL) and others, Dec 5, 2001

            “We begin with the common belief that Saddam Hussein is a tyrant and a threat to the peace and stability of the region. He has ignored the mandate of the United Nations and is building weapons of mass destruction and the means of delivering them.” – Sen. Carl Levin (D, MI), Sept. 19, 2002

            “We know that he has stored secret supplies of biological and chemical weapons throughout his country.” – Al Gore, Sept. 23, 2002

            “Iraq’s search for weapons of mass destruction has proven impossible to deter and we should assume that it will continue for as long as Saddam is in power.” – Al Gore, Sept. 23, 2002

            “We have known for many years that Saddam Hussein is seeking and developing weapons of mass destruction.” – Sen. Ted Kennedy (D, MA), Sept. 27, 2002

            The debate was not about his previous use of chemical weapons, but about threat inherent in his continued possession of these weapons given his past willingness to use them.

            Try to keep up.

          • The debate was not about his previous use of chemical weapons, but about threat inherent in his continued possession of these weapons given his past willingness to use them.

            You can try to divert attention from the claims that Saddam had WMDs but that will not work because there was no evidence that he was any more capable of making effective weapons than any other country. You give a decent engineer 20 kids graduating out of a good engineering school and he can set up a chemical engineering program for you. That does not mean that he has any intention of setting one up or the mans to attack the US effectively.

            Your BS and excuses are getting a little tiring. Do you have anything factual to argue your case or are you going to keep resorting to opinions, tall tales, and name calling to keep convincing yourself that you are not working to undermine your own country by supporting idiots that make it less safe and push it towards insolvency?

        • Fear of similar treatment led Muammar Gaddafi to abandon a nuclear program that no one was aware that he had…

          Yeah, a lot of good THAT did him.

  3. Reagan talked a good game but increased spending and the size of government more than Carter or Clinton. Talk is cheap. What matters are actions.

    • “Reagan talked a good game…”

      Yep, and Reagan’s bullish words and actions, for the United States economy, established a base for unprecedented economic growth and brought down the Soviet Union.

      Look at the profound growth of S&P 500 since Ronald Reagan took office in January of 1981.

      The fall of Soviet communism, enabled by the U.S., its allies and the Soviet system itself, has insured the ability of the most virulent critics of government to try and proliferate their opinions at will.

      • Yep, and Reagan’s bullish words and actions, for the United States economy, established a base for unprecedented economic growth and brought down the Soviet Union.

        That is one view. Another is that the Volker appointment and the deregulation began by Carter was far more responsible than Reagan’s massive spending increases. And the USSR fell because central planning does not work. Like the lefties in the Democratic Party the national socialists in the Republican Party have trouble understanding this.

        Look at the profound growth of S&P 500 since Ronald Reagan took office in January of 1981.

        That was Volker, not Reagan.

        • Volker should be given due credit for a large role in reducing inflation. Pro business policies by Reagan were the much bigger reason for the stunning and sustained S&P climb after the inauguration of RR.

          • Volker should be given due credit for a large role in reducing inflation. Pro business policies by Reagan were the much bigger reason for the stunning and sustained S&P climb after the inauguration of RR.

            Volker took action. Reagan talked a good game. Most of the pro-economy deregulation that he got credit for was the result of the Carter administration policies, not anything that Reagan did. (Ironically, Carter’s deregulation of the trucking sector got the unions to back supposedly anti-union Reagan.)

    • bush and obama are the horrible echo of hoover and fdr.

      under coolidge, fed spending was 2% of gdp. it was hoover (a republican) that got the ball rolling on all sorts of welfare and stimulus spending and then provided the ideological air cover for someone like FDR to really run wild.

      here we are again.

      neither team red nor team blue has any real commitment to reduced spending or sensible policy at this point.

      one used to be able to count on the republicans to be fiscally sensible (gingrich) but morally/socially repressive and the dems to fight for your social liberty but pick your pocket and redistribute wealth like a drunken sailor.

      now we have a drunken sailor redistributing wealth while pushing for more patriot act horrors (warrant-less wiretap, extrajudicial assassination, indefinite detention without charge or trial, etc)

      don’t get me wrong. bush was not much better.

      but the longstanding see-saw of the 2 parties has broken. we now lose social liberty and fiscal responsibility during both red and blue phases.

      • “one used to be able to count on the republicans to be fiscally sensible (gingrich) but morally/socially repressive” — morganovich

        Morally and socially repressive? Really?

        You must be referring to the Republicans standing against the Democrat policies of segregation and Jim Crow. Or, their refusal to support the KKK the way that the Democrats and their union cronies did. Or, maybe it’s the fact that the Republicans respect human life and in tact families that leads you to write thie horseshit.

        Either way, we are beginning to see where your version of morality and “tolerance” leads.

        • Morally and socially repressive? Really?

          Yes. Really. They support the War on Drugs, an amendment to prevent gay marriage, were against gays serving openly in the military, etc. That is what the ‘social’ part of social conservative stands for.

          You must be referring to the Republicans standing against the Democrat policies of segregation and Jim Crow. Or, their refusal to support the KKK the way that the Democrats and their union cronies did.

          Pointing out that Democrats are racist and stupid does not change the argument. Both sides are evil and stupid. Which is why so many voters are now registering as independents.

        • “They support the War on Drugs, an amendment to prevent gay marriage, were against gays serving openly in the military, etc. That is what the ‘social’ part of social conservative stands for.” — Vag

          Yeah, yeah, yeah, and up until about a month ago Barrack Obama and the majority of Democrats professed to be agianst gay marriage too. They were also in favor of enforcing of DOMA. And they still claim to support the “War on Drugs”.

          You’re a genius.

          • Yeah, yeah, yeah, and up until about a month ago Barrack Obama and the majority of Democrats professed to be agianst gay marriage too. They were also in favor of enforcing of DOMA. And they still claim to support the “War on Drugs”.

            You’re a genius.

            I think that you have a reading comprehension problem. I do not hold up the left as being virtuous in tolerant. The Democratic Party leaders are just as evil and stupid as GOP leaders.

      • but the longstanding see-saw of the 2 parties has broken. we now lose social liberty and fiscal responsibility during both red and blue phases.

        Correct. Which is why both teams need to be fired by the voters.

    • um, no.

      this was nonsense when regan said it and nonsense today.

      volcker was right and regan was wrong. the double dip recession triggered by the rate hikes was no popular when it was going on. recessions never are. but cutting the double digit inflation and cycle of stagflation from the 70′s what what led to the boom of the 80′s and 90′s.

      volcker saved us. he is rightly lionized as the best fed chair we have had.

      the fed is way too loose now, not too tight.

      greenspan was a fool who inflated 2 bubbles. ben is a bigger fool who is inflating the nastiest one yet.

      we have lived in a constant bubble-bust scenario since the late 90′s.

      i realize that anyhting less than tractor trailers full of $100 bills free for the taking on ever corner seems like loose money to you ben, but there has never in US history been policy so loose.

      your notions that policy right now is somehow tight is just absurd.

      the problem is that the gains from cheap borrowing are being swamped by the losses from interest income and the absurd distortions of markets. interest rate stimulus us, at best, a very short term solution. long term, it becomes a pernicious drag on an economy. we are WAY past that point.

      looser money will just make it worse.

      we are experiencing the worst recovery from recession since the depression but some of the strongest assets markets as the bubble fed keeps misunderstanding where growth comes from but now cannot get out of the corner into which it is painted. ben knows that this thing collapse the minute he stops printing. it’s a bubble and we are painted into a corner. like greenspan before him, he will keep it going until he retires, then hand the bomb to the next guy.

      • “volcker was right and regan was wrong. the double dip recession triggered by the rate hikes was no popular when it was going on. recessions never are. but cutting the double digit inflation and cycle of stagflation from the 70′s what what led to the boom of the 80′s and 90′s.” — morganovich

        “… As Volcker led the Fed as the Carter administration waned, inflation averaged a percentage point a month.

        It wasn’t for Volcker’s lack of trying. Volcker threw everything at the wall in a vain attempt to beat down inflation in those seventeen months. Out of the gate in September 1979, Volcker raised interest rates. This had no effect. In October, he strove to limit the money supply by such measures as raising reserve requirements at banks. No results. In 1980, he conceded to credit controls whereby bank lending was curtailed. The economy went into recession. Volcker hammered away at all his devices, but as 1980 came to a close and Reagan prepared to take office, inflation was running above 10%, and the prime rate of interest somehow stood at 22%.

        When Reagan became president in 1981, Volcker kept plugging away at all his tightening maneuvers. Reagan was content to let him go, even as it became apparent that Volcker might get too tight. For Reagan was introducing a transformational policy reform on the fiscal side: marginal tax cuts. …

        The difference was not Fed policy – that had remained unchanged throughout the transition. The difference was fiscal policy. Marginal tax cuts raised the after-tax return on economic activity, getting people more interested in conducting that activity. This required more money. Real demand for money spiked enormously given the Reagan tax cuts. This enabled the Fed to supply money that actually was doing something economically outside of feeding the price level. …

        Paul Volcker was part of the comedy of errors that was the latter stage of the Carter administration. Without Reagan, Volcker would have been another in a line of failed Fed chairmen.” — Volcker and the Reagan Legacy, Forbes

        Paul Volcker actually went to Congress and lobbied against Reagan’s tax cuts. And it was Reagan that allowed massive private sector luquidation to occur during his years in office clearing the way for solid economic growth.

        The left loves to rewrite history. Reagan succeeds economically – it’s all Paul Volcker. Regan’s policies help to bring on the collapse of the Soviet Union – it’s all thanks to Mikhail Gorbachev. Yeah, right.

        • When Reagan became president in 1981, Volcker kept plugging away at all his tightening maneuvers. Reagan was content to let him go, even as it became apparent that Volcker might get too tight. For Reagan was introducing a transformational policy reform on the fiscal side: marginal tax cuts. …

          What bullshit. All you are quoting is a promotion piece by Forbes, which likes to write narratives favourable to its heroes just as the left does.

          What we need to keep in mind that it was Carter’s deregulation and Volker’s targeting of the money supply that sparked the recovery. Yes, Reagan did say a lot of nice things about free markets and liberty. But he acted in ways that expanded spending and the size of government, just as the left wanted. What you got was bigger government and narratives that allowed fiscal conservatives to stop worrying about deficits and spending.

          • “What bullshit. All you are quoting is a promotion piece by Forbes” — Vag

            When you can’t deal with the argument, attack the source.

            By the way, what is your source again? Oh yeah, it’s a real moron – you.

          • When you can’t deal with the argument, attack the source.

            No. I attack the fact that it is a puff piece without any evidence to support the central conclusion that a complex modern economy has one lever, marginal tax rates, that controls everything. Narrative may be what you deal with in your circles but I prefer actual facts.

            The fact is that Reagan increased taxes several times. He did raise the debt ceiling. He did grow the size of the bureaucracy and increased regulations. The deregulation victories that most Republicans point to were the result of actions taken by Carter.

            Reagan received the endorsement from the Teamster’s Union in exchange for his promise that he would delay deregulation of trucking. It was Carter who deregulated the telecom sector. It was Carter that got rid of the controls on oil, even though he attached a windfall profit tax to the legislation. It was Carter who deregulated the airlines. Compared to the massive boost that came from deregulation Reagan’s reduction of marginal tax rates that was paid for by closing loopholes that caused the average person to pay more in taxes. Most of the benefits from the 1981 tax cut were taken away by bracket creep and increases in SS taxes and the average person was not better off than before. What did make things better was the new environment in which deregulation allowed a boom in stagnant industries.

            Reagan is overrated by the GOP because his actions were those of a big-spending, big-government politician.

          • “Volker’s targeting of the money supply …” — Vag

            Tell us, how does one effectively target the money supply when you are dealing with the world’s reserve currency? Yes, you can effect the domestic money supply, but what about all those dollars held in foreign accounts? Even Friedman saw this as a fools errand. You do know that the value of the dollar fell in the aftermath of Volcker’s actions, right?

            More disastrously, targeting the money supply resulted in the Fed funds rate bouncing around on a daily basis such that businesses faced the nearly impossible task of raising capital in an environment of ever increasing uncertainty.

            Charles Kadlec and Arthur Laffer wrote at the time, “… the Fed’s action reduced the viability and attractiveness of the dollar” increasing the prospects of inflation. This in spite of the fact that Volcker’s targets “resulted in a slower growth in the measured quantity of money.” Laffer and Kadlec argued for, “policies that lead to an excess demand for dollars relative to their supply.”

            Of course, who are Kadlec and Laffer compared to a genius, like you?

          • Tell us, how does one effectively target the money supply when you are dealing with the world’s reserve currency?

            Easy. You stop increasing the money supply and let rates find a level at which they depress demand.

  4. A lot has changed, since 1980, including the growing gap between productivity and median compensation, while government continues to raise the cost of living.

    Consequently, income inequality is similar to the late 1920s, before FDR.

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