Not Buying the Reaganomics Snake Oil

Are you old enough to remember the Reagan years? I am. And I don’t buy the GOP dogma that Reagan worked some miracle of prosperity by cutting taxes dramatically. What I remember is that in the Carter years we were in the midst of a period of high inflation produced by Vietnam War spending and the OPEC oil shock. What I remember is that Jimmy Carter appointed Paul Volcker to head the Fed to cause an intentional recession to break the back of the inflation. What I remember is that Volcker did that. What I remember is that Reagan then had the benefit of being handed an economy with the tailwinds of the dramatic post-inflation dropping of interest rates and the concomitant release of capital to address pent-up demand. And even if the Reagan tax cuts helped propel the economy then, that doesn’t mean tax cuts now will have any meaningful impact on jobs. Apples and oranges. There’s zero evidence of pent-up demand that will propel job growth when corporate taxes go down.