Thomas Sowell
Economist / Author
What The Democrats Are Teaching Americans
Ronald Reagan taught Americans to believe in the American Dream. We were already, and in Reagan's world view could be an even brighter, "City on a hill." After one term of decreasing regulation and slashing marginal tax rates, America was back on track! Do you remember Reagan's re-election theme ...
"It's Morning In America Again"
And it was! Entrepreneurial spirit and a pro-growth agenda were at the center of the Reagan vision and his success. Jack Kemp, Arthur Laffer and the gang re-launched America off of the USS Jimmy Carter... a sinking ship poorly lead by its captain.
Instead of the optimism of Reagan, Barrack Obama teaches pessimism and class warfare. His tone and style may be glossy, his suits stylish and his youthful smile bright, but his ultimate message is bleak and depressing. Even the leading, politically moderate, European business magazine sees this clearly:
"The rich appear in Barrack Obama's speeches not as entrepreneurial role models but as modern versions of the 'malefactors of great wealth' denounced by Teddy Roosevelt a century ago..."
The Economist Magazine
"Unhappy America"
July 26, 2008
Unfortunately, Many Americans Are Believing It?
Today I was picking up medical records to send to an insurance company. Because I had a little heart problem a few years ago, I ended up filling out paperwork at the offices of a large heart specialist group here in Nashville. While I was sitting in the waiting room, the following exchange occurred between what appeared to be a 60 year old lower/middle class man and another couple that worked together in a small business (they own and drive their own 18 wheeler).
The man said:
"There are only a few people getting rich in this country."
"And they want to keep the rest of us poor."
The couple replied:
"Yep"
Instead of the optimism of Reagan, Barrack Obama teaches pessimism and class warfare. His tone and style may be glossy, his suits stylish and his youthful smile bright, but his ultimate message is bleak and depressing. Even the leading, politically moderate, European business magazine sees this clearly:
"The rich appear in Barrack Obama's speeches not as entrepreneurial role models but as modern versions of the 'malefactors of great wealth' denounced by Teddy Roosevelt a century ago..."
The Economist Magazine
"Unhappy America"
July 26, 2008
Unfortunately, Many Americans Are Believing It?
Today I was picking up medical records to send to an insurance company. Because I had a little heart problem a few years ago, I ended up filling out paperwork at the offices of a large heart specialist group here in Nashville. While I was sitting in the waiting room, the following exchange occurred between what appeared to be a 60 year old lower/middle class man and another couple that worked together in a small business (they own and drive their own 18 wheeler).
The man said:
"There are only a few people getting rich in this country."
"And they want to keep the rest of us poor."
The couple replied:
"Yep"
Fear And Loathing On the Campaign Trail
Herein lies the terrifying part. The story line manufactured by the Democrats doesn't just teach that talent and opportunities favor the rich, it teaches that the rich conspire to "keep the rest of us poor." While this may be good short term politics for Democrats, it is horrible for American and terribly damaging to individual American families. Americas prosperity is not a zero-sum game! There is not one pie to cut and share. As Reagan taught, we can and will grow the pie. Then, everyone can get a bigger piece.
And... It Is Not A Zero Sum World?
The softness in the US economy and the strength of emerging countries (BRIC - Brazil, Russia, India, and China) has a lot of workers scared. In fact, many believe that China's economy is already bigger, by a lot, than the US economy. In reality, at its current growth rate, which will likely slow in the coming years, it will take 25+ years for China's GDP to equal that of the USA (assuming the USA maintains the current growth rate).
Sadly, since we don't have a Ronald Reagan on the political stage, The Economist Magazine has to point out the true Reagan way of thinking. This same one pie mentality has many Americans, taught by liberals and labor unions, believing that we must retreat from free trade. This fits the Obama narrative perfectly. The Economist points out that even if "Asia's rise continues unabated, it is wrong...
Herein lies the terrifying part. The story line manufactured by the Democrats doesn't just teach that talent and opportunities favor the rich, it teaches that the rich conspire to "keep the rest of us poor." While this may be good short term politics for Democrats, it is horrible for American and terribly damaging to individual American families. Americas prosperity is not a zero-sum game! There is not one pie to cut and share. As Reagan taught, we can and will grow the pie. Then, everyone can get a bigger piece.
And... It Is Not A Zero Sum World?
The softness in the US economy and the strength of emerging countries (BRIC - Brazil, Russia, India, and China) has a lot of workers scared. In fact, many believe that China's economy is already bigger, by a lot, than the US economy. In reality, at its current growth rate, which will likely slow in the coming years, it will take 25+ years for China's GDP to equal that of the USA (assuming the USA maintains the current growth rate).
Sadly, since we don't have a Ronald Reagan on the political stage, The Economist Magazine has to point out the true Reagan way of thinking. This same one pie mentality has many Americans, taught by liberals and labor unions, believing that we must retreat from free trade. This fits the Obama narrative perfectly. The Economist points out that even if "Asia's rise continues unabated, it is wrong...
... and profoundly unAmerican...
... to regard this as a problem! Economic growth, like trade, is not a zero-sum game. The faster China and India grow, the more American goods they buy. And they are booming largely because they have adopted America's ideas."
International economics is no more of a zero sum game than than the economics between American families and between the rich and the poor. Free trade and free markets will grow the pie for all. Ronald Reagan was right!
Sadly, Milton Friedman was also right when commenting on the past, present, and future of free market thought. He said...
"Adam Smith was a radical and a revolutionary in his time - just as those of us who preach laissez faire are in our time."
Finally, add to this a reminder from Ludwig von Mises ...
"There cannot be too much of a correct theory."
Note: Please read the first comment to this post and my response for some outstanding data on Reagan's economic legacy.
9 comments:
"What we got in the Reagan years was a deep recession and then half a dozen years of fine growth as we climbed out of the recession, but nothing beyond that."
Robert Solow, 1987 Nobel Prize winner for his analysis of economic growth.
Anonymous,
Thanks for stopping by!
I agree that unwinding Reaganomics was bad.... hence the "nothing beyond that" comment from Robert Solow. Carter gave us the deep recession, Reagen fixed it... then we started to undo Reagan's policies with GHW Bush's tax increases. Let's look at the objective facts:
1. Real median family income grew by $4,000 during the Reagan period after experiencing no growth in the pre-Reagan years; it experienced a loss of almost $1,500 in the post-Reagan years. (After Bush started undoing the good work Reagan did.)
2. Interest rates, inflation, and unemployment fell faster under Reagan than they did immediately before or after his presidency.
3. Real economic growth averaged 3.2 percent during the Reagan years versus 2.8 percent during the Ford-Carter years and 2.1 percent during the Bush-Clinton years.
Note: data drawn directly from a Cato Institute analysis.
Thank you.
For anyone interested there is an extraordinary documentary called Passing Poston about the Japanese American citizens forcibly placed in interim camps during WWII. The film is being shown at the Two Booths Pioneer Theater from August the 8th till the 14th. The documentary follows the tales of four former internees, and shows their struggles with their painful past and their search for a place to belong in a country that labeled them the enemy. It is a must see!!
For tickets and info go to www.twoboots.com/pioneer
Nathan Newman's June 9, 2004 summery of THE MYTHS OF REGANNOMICS. Full article posted on Ludwig von Mises Institute's web site: http://www.mises.org/article.aspx?Id=1544
"This essay, The Myths of Reaganomics, from the Mises Institute, a fundamentalist pro-capitalism organization.
It highlights the lies of Reaganism, which even honest conservatives recognized, and the distance between rhetoric and reality:
In 1986, the last recorded year of the Reagan administration, the federal government spent $990 billion, an increase of 68%. Whatever this is, it is emphatically not reducing government expenditures.
...We get federal spending as percent of GNP in 1980 as 21.6%, and after six years of Reagan, 24.3%.
The next, and admittedly the most embarrassing, failure of Reaganomic goals is the deficit...One of the most curious, and least edifying, sights in the Reagan era was to see the Reaganites completely change their tune of a lifetime.
The famous "tax cut" of 1981 did not cut taxes at all. It's true that tax rates for higher-income brackets were cut; but for the average person, taxes rose, rather than declined. The reason is that, on the whole, the cut in income tax rates was more than offset by two forms of tax increase. One was "bracket creep," a term for inflation quietly but effectively raising one into higher tax brackets, so that you pay more and proportionately higher taxes even though the tax rate schedule has officially remained the same. The second source of higher taxes was Social Security taxation, which kept increasing, and which helped taxes go up overall.
So here is the bottom-line consensus on Reaganism:
* Increases in spending, with shifts in spending from the needs of the poor to the military-industrial complex
* Massive increases in the deficit
* Tax increases for working people, where only the very wealthy benefited.
What is there to honor in this record?"
Most recent Anonymous,
I agree, and I disagree. Let me explain.
I don't disagree with the facts you lay out. What I object to is that you lay out only part of the story. By omitting important details, you strengthen your argument but weaken your credibility.
- The tax cuts lead to a massive increase in tax revenue because of increased growth and taxable revenue.
- Reagan wanted to stop bracket creep and was stopped by Congress. - Reagan was against Social Security as an institution and would have eliminated it if Congress had been on-board.
- In the first 3 years of President Reagan's administration, he decreased non-discretionary spending by 14%.
You have to know that your "bottom-line consensus on Reaganism" isn't a consensus at all. Further,your first 2 summary points are really the same point....#1 happened and caused #2. On #3, as I recall Reagan was against bracket creep and Social Security tax increases. You may want to look to Tip O'Niel for your villain!
A final point... with the collapse of the USSR and the opening of China, I believe that there is a BIG opportunity to close overseas bases and reduce the size of the military. We should "complete" the Iraq / Afgan missions and come home ASAP. And we should not have gone into Iraq in the first place.
But, I have a different view of the history of the late 70s and 1980s than you. I believe that the Reagan military buildup quickened the collapse of the USSR. And I believe they were evil.
Every time I read this kind of tripe, I want to laugh. I don't know anything about the statistics, and furthermore don't care. It's the personal things I care about, and you saying that Barack Obama is about gloom and doom, is ridiculous. He has made me and many people I know feel hope for the first time in almost eight years, that somebody might care. George Bush and his cronies have ruined this country and I can't wait to see the day he is gone from the White House forever. And what good does free trade do us, if we aren't making anything here to sell to those people you're talking about? You Republicans are all alike. Down with the people. Let them eat cake. Let's take care of ourselves first. Maybe you need to come down off your perch and put yourself in the shoes of all the people in this country that are struggling to get by. You sound like a pompous jerk, just like all your cohorts that try to keep feeding us your lies. I'm 67 years old, so I've lived through a few Presidents and Ronald Reagan was just another President, not so great, not so bad. I remember buying a house on a VA loan at 12% interest when he was in office. I also remember well the Iran-Contra affair, which people like to forget. Reagan was either involved in it or asleep at the wheel, whichever, he wasn't doing the job he was hired to do. People need to stop glorifying him, he wasn't that great. I by the way voted for him, once.
To: The mad at me...anonymous,
Thanks for reading and commenting. I hope you read more and come back often. Further, please comment often!
If you read a few of my posts, you'll see that I am not a "W" fan. So on that we agree.
Commenting on the rest of your points:
1. It is very hard to engage in discussion when you start with the point that you "don't know or care about the (facts) statistics". Although you sound like the perfect Obama supporter.
2. "All you Republicans" is like saying "all you Democrats" or "all you Americans"... there are big differences within the country and within the parties. Our Tennessee, Blue Dog, Democrats don't resemble the Pelosi wing and don't like them very much.
3. Any vision for America that uses glossy speeches to sell: class warfare and the idea that only Federal Government can save you, etc .... IS BLEAK! The messenger is terrific... the message is horrible.
4. As for Reagan, he wasn't perfect. But your 12% mortgage must have been early in his term when Paul Volker's Federal Reserve was fighting the Jimmy Carter stagflation monster. If you somehow blame that on Reagan, you need to go back and look at economic history. You are confused.
5. Finally, the personal attacks in the middle (pompous jerk, come down of my perch, let them eat cake, etc) make me really sad for you.
Has it ever occurred to you that the middle class isn't really concerned about the rich getting richer? They currently care about making ends meet.
Post a Comment