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翻过里根这一章

Dec 30, 2019 Simon Johnson

华盛顿—三个主要因素决定了经济繁荣：人力资本（人口的受教育程度和技能）、实体资本（实体基础设施，包括机器、建筑、能源和交通等的数量和质量），以及技术（科学知识及其应用）。从20世纪80年代开始，美国总统里根政府的决策者们所信奉的增长理论是，降低资本税率——以及更一般地，降低高所得的税率——能带来更多投资和更快的新技术应用。这反过来又将刺激总体工资和所得增长。这套政策在美国实施了40年，共和党和民主党或多或少都会这样做，总体结果可以用一个词来总结：令人失望。

这一失望部分体现在1981年里根革命开始之后经济增长率始终较低上，特别是在过去二十年种。在过去，美国经济每年往往能够增长3%以上，但如今，能达到2.5%便谢天谢地了——而吐过国会预算办公室是正确的话，未来十年连2%的年增长率都难以企及。

如果我们考虑到谁能够从增长中获益的话，那么将更加失望。具体来说，没有证据表明，为顶层群体减税会带来里根集团信誓旦旦所说的“涓滴效应”。

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Simon Johnson

Writing for PS since 2007
125 Commentaries

Simon Johnson, a former chief economist at the International Monetary Fund, is a professor at MIT Sloan and co-chair (with Retsef Levi) of the COVID-19 Policy Alliance, focused on actionable intelligence and operational recommendations to limit the human damage from the pandemic. He is the co-author, with Jonathan Gruber, of Jump-Starting America: How Breakthrough Science Can Revive Economic Growth and the American Dream.

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0 Comments on this paragraph, 18 in all 18 Comments on this article

manuel werner Jan 12, 2020

I'm supposing they will preside, these billionaires, in what is morphing into an overt plutocracy, right to the bitter end. It's hard to persuade people in power that there's something wrong with the system that put them in power. They are the ensurers of the entropy that has not ever spared any system, political, economic, social, mechanical in the historical record. All systems decline. This does not, of course, mean that democracy does not have within its relative newness, mechanisms that can mitigate the effects of omni present entropy. Pity that Hesiod included hope in Pandora's jar of bad stuff.
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D. V. Gendre Jan 7, 2020

When Reagan came to power (and Thatcher in the UK) the economy was already in bad shape! Carter didn't do much. One has to admit that Carter couldn't even handle the savings and loans crisis. Reagan did it!
BTW the US had the slowest recovery and growth rates during the democratic Obama presidency. So how come that Mr. Johnson blames Reagan for that?
Sadly here at PS are mainly biased leftist economists.
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D. V. Gendre Jan 7, 2020

The "personal wealth" was only smoke because one can not add price increases to the wealth! If I own a stock that increased from $1 to $1000.- this may add $999.- to my wealth indeed, but the other person buying that stock just transferred from his wealth $1000.-. There was no gain at all in the economy! But most economists can not see that there is no wealth behind speculative increases in prices whether this are stocks or homes!
Again the boom in credit from 1971 to 2007 was only possible due to the eliminiation of the gold exchange standard without any adequate replacement!
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D. V. Gendre Jan 7, 2020

People seem to forget that the US went bankrupt in 1971 and the gold exchange standard had to be abolished so the US could pay its debt with inferior dollars. The gold exchange standard was never replaced by any adequate measurement.
The era and dogma of inflaion has set-off since then, which is still in place. The economic consensus today is still that the economy needs 2 - 4 % of inflation so people consume the hell out of the economy! A complete unsustainable economic dogma.
Of course inflation is usually good for enterpreneurs, speculators and stock holders and other "flexible income earners" but unfortunately bad for wage earners with relatively fixed incomes. There was no genius needed to see what will happen to the average wage earner in the age of inflaiton.
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D. V. Gendre Jan 7, 2020

Blaming Reagan for what went wrong is very narrow minded! Mr. Johnson seems to be a terrible biased and one dimansional economist how does not understand the following:
Reagan was right in doing so - and it has helped the economy in a certain degree.
But the world has changed rapidly since he was President. The Iron Curtain was torn off! Eastern Europe and Russia were suddenly part of the global economy. China opend up its economy rapidly and with it almost all of Asia (Taiwan, Korea, Vietnam etc.)! I don't think that Reagan or any other President could have foreseen such dynamics and huge shifts!
Comparing the world as President Reagan knew it to today is naive! And then drawing conclusions and blaming Reagan for the problems of today is just very amateurishly.
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D. V. Gendre Jan 7, 2020

"Three primary factors determine economic prosperity: human capital...; physical capital...; and technology (scientific knowledge and its application)."

I can only recognize one factor here and not three! The physical capital, namely the amount and quality of infrastructure, machines, buildings etc. is also determined by the human capital. Same for technology, namely scientific knowledge and its application!

Furthermore human capital is much more complex then just "human capital". The most important attributes on human capital for economic prosperity are:
The willingness of the population for "hard" work, willingness of making overtime, reliability and trust of population, work ethics, productivity of workers etc. These are the true factors of prosperity!

The other, second factor, are natural resources of course. These two factors determine the prosperity of a country! But having said that, the human capital is much more important like many successful countries without resources and like many poor big countries with lots of resources show.
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Cary Fraser Jan 6, 2020

Intellectual bankruptcy underpins the many failures of contemporary American policy development and policy implementation. The 2007-2008 crash reflected that reality and the election of Donald Trump has exacerbated the problem. In 1983, the Reagan administration issued the assessment below:

Our Nation is at risk. Our once unchallenged preeminence in commerce, industry, science, and technological innovation is being overtaken by competitors throughout the world. This report is concerned with only one of the many causes and dimensions of the problem, but it is the one that undergirds American prosperity, security, and civility. We report to the American people that while we can take justifiable pride in what our schools and colleges have historically accomplished and contributed to the United States and the well-being of its people, the educational foundations of our society are presently being eroded by a rising tide of mediocrity that threatens our very future as a Nation and a people. What was unimaginable a generation ago has begun to occur--others are matching and surpassing our educational attainments.
If an unfriendly foreign power had attempted to impose on America the mediocre educational performance that exists today, we might well have viewed it as an act of war. As it stands, we have allowed this to happen to ourselves. We have even squandered the gains in student achievement made in the wake of the Sputnik challenge. Moreover, we have dismantled essential support systems which helped make those gains possible. We have, in effect, been committing an act of unthinking, unilateral educational disarmament.
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Barry Rosenfeld Jan 5, 2020

Unfortunately, what Goldwater said in 1964 still rings true, if not for different reason. Both parties see the electorate as passive and only appeal to voters during elections. The rest of the time they are doing favours for their major contributors. Never re-elect anyone. Better still, limit terms to one short one - at all levels.
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Sergio BULIAN Jan 1, 2020

You are right. Politics is unpredictable, but if there are no economic unforeseen events (crisis) I am afraid that President Trump's inertia will win.
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Paul Daley Jan 1, 2020

Good article. Capital income has been privileged at the expense of earned income by both fiscal and monetary policy. Expanding the tax base to include wealth, taxing all income equally regardless of source, and allowing monetary policy to support earned income as well as asset prices would all help sustain growth and rebalance the distribution of benefits.
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Michael Public Jan 1, 2020

I would say forever. The reason is simple. The voting public see politics through the lens the media presents it in. The media is currently subordinate to the oligarchy. To fix any political problem, this one included, you first have to convince Rupert Murdoch and Jeff Bezos it should be solved. I would like to see you convince those two there should be wealth tax!
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Robert Wolff Dec 31, 2019

Same old arguments that we have known for years, that deregulation and tax cuts help the super rich at the expense of the working middle class.

Reminds me of Will Roger's joke, "Politics is like the weather. Everybody talks about it but nobody does anything about it!"

Trump again lowered taxes like Reagan, gave Arthur Laffer the Presidential Medal of Freedom for the "Laffer Theory" which never did work and never will work.

A recent article by Ray Dalio of Bridgewater stated his conclusion that since Trump tax policies and international tariffs have failed to achieve their stated objectives (promises of a better economic life for the working middle class) the ONLY alternative now is to raise taxes on the rich through higher income taxes plus a wealth tax on their total assets.

But will the above happen, or can it ever happen, under the current economic and political dictatorship of the 1% that is growing in wealth and political power? My assessment is that the necessary changes in US economic structure will not occur until after another severe recession in which the working middle class loses even more to the rising 1% oligarchy than it did in the Great Recession, and suddenly realizes all the Reagan/Trump hypes that they were improving the lives of the middle class were just a lot of tripe and calculated lies.
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Mirek Fatyga Dec 31, 2019

until the political system delivers a credible threat of expropriation. The Soviet Union did this in the early XXth Century, there is no equivalent at the moment.
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j. von Hettlingen Dec 30, 2019

According to Simon Johnson the 2020 campaign platform for Democratic candidates has to veer away from Trump's trickle-down economics. This cutting taxes for the rich will not spur growth in the long term. Worse it will just entrench inequality further. American voters need to know that it is wrong to continue “some version of the Reagan regime, which is likely to deliver consistently mediocre growth and extreme income inequality.”
While the author underscores the urgency to tackle economic inequality, he knows too well that the “oligarchy” that Ronald Reagan had created will resist any tax increase and fight it tooth and nail. The 2017 overhaul of the federal tax law was Trump’s legislative achievement. In retrospect Reagan was totally wrong about his fiscal policy being a boon to the economy. On the contrary it had contributed to the biggest budget deficits in US history. As a result to Trump's tax cut, last month the budget deficit rose by 2% to $209 billion. In the 2019 budget year, the US ran up a deficit of $984 billion, the most in seven years. For 2020 it will hit $1 trillion and will stay above this figure for the next decade.
The idea that cutting taxes for the rich was a good way to both raise revenue for the government and create jobs for the unemployed has not just been discredited by the IMF, even George H W Bush called it “voodoo economics” in 1980. Thanks in part to the chaotic manner in which Trump's bill was rushed through Congress in 2017, tax cut had enabled multinational corporations to dodge paying hundreds of billions of dollars, by claiming their profits were earned outside the US. As the IRS is underfunded and understaffed, it currently fails to collect nearly 15% of total tax liabilities – primarily to the benefit of those with high incomes.
What the author finds worrying is that “as rich people accumulated more wealth, both in personal terms and through the companies they controlled, they plowed some of this money into boosting their own political influence, with a view to increasing their wealth still further.” During his 2016 campaign, Trump vowed to “drain the swamp” in Washington. But since he took office, his focus has been protecting his own personal interests, pursuing policies to enrich his family and fellow plutocrats.
Ronald Reagan was blamed for the 2008 economic crisis. The late president was responsible for deregulation in the financial sector and, in particular, loosening restrictions on mortgage lending to people with lower down payments. In the wake of one of the worst financial crises in history, governments in the US and Europe moved to adjust financial regulation.
The Dodd-Frank Act, officially called the Dodd-Frank Wall Street Reform and Consumer Protection Act, was signed into law by President Obama in 2010 in response to the crisis that became known as the Great Recession. Dodd-Frank put regulations on the financial industry and created programmes to stop mortgage companies and lenders from taking advantage of consumers. In February 2017 Trump moved to chisel away at Obama’s legacy on financial regulation, announcing steps to revisit the rules.
There is a saying: History does not always repeat itself, but it often rhymes. The author points out that the “US has, of course, faced a situation like this once before – at the end of the nineteenth century. The response then was a range of reforms spread out over decades, including antitrust legislation and legal rulings against the strongest corporate interests on the planet, direct election of the US Senate, and enactment of the federal income tax (in the face of a hostile Supreme Court). Expanding social insurance – ultimately including government-run social security – and strengthening financial-market regulation in the 1930s was part of the same broad response. The system that emerged served the US well, until it was steadily dismantled following the election of Ronald Reagan in 1980.”
As Trump’s 2017 overhaul of federal tax law has inflicted much harm on the country’s budget, the next Democratic president will have no choice but to repeal Trump’s tax cut and Jobs Act.
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Prashant Kotak Dec 30, 2019

Am I the only one who did a startled double take, when mistaking Mrs. Reagan for Ms. Von der Layen at first glance?
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Petey Bee Dec 30, 2019

Yes, this is the discussion that needs to take place.

We have bipartisan consensus to shovel cash into the mil contractors (for what? the list of enemies simply grows longer), a feeble and ineffective token opposition to cutting corporate taxes, but a very firm line against spending on social services that are standard in all other countries at our level of wealth.

To be completely honest, the damage is done. Even in the most optimistic political scenario, it isn't going to be reversed for a generation. But it still might be a good idea to stop digging the hole deeper. There is always room to make it worse.
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Robert Coleman Dec 30, 2019

The answer to the last question in the article is: For as long as they want to, for their wealth has grown so great that they now control everything; the press, the TV news, the Congress, the Senate, the Police, the Courts, the internet (although still consolidating power), and the military services. There may be an allowance here, a softening there, but bar some miracle, it's game over. The rich have won.
- Robert Wolff Dec 31, 2019
  
  And even more startling is that as the rich take on more and more and more economic and political power, that not even Democracy can reverse their climb to absolute power, because the rich also control our "Democracy".
  
  Enough said. The time to act was yesterday.
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