Many economist would disagree that Volcker and Reagan the the others could've ended stagflation without a recession. As for the elder Bush paying the price for the previous economic boom, economies expand and contract. Just as the economy has been slowing under the end of the Clinton regime (2.2% in the 3rd quarter of 2000, 1.4% in the 4th. An expected 0.7 in the first of 2001.), the party had to end in the '80s, too. Many economists believe that Bush and the Congress exacerbated the situation by raising taxes in 1990 (at a time when the economy was slowing, which is a bad time to raise taxes). Had they continued with a "Reaganomic" plan of attack (keep taxes low, perhaps even lower them and keep interest rates low and don't keep the money supply so tight), there may not have been a recession of the early '90s. One could make the case that Bush was a one-termer because he specifically didn't follow the Reagan doctrine. And there was Greenspan the Inflation Fighter there raising interest rates in an effort to fight perceived inflation (something that he did again in recent years, quite possibly helping to slow growth now) that contributed to the early '90s recession. But my original point was not to defend Reagan necessarily (there were plenty of things he did that I didn't agree with, and I still give the private sector and the Fed the most credit for anything the economy does), just to point out that, under the accepted definition, there wasn't a recession in the late '80s and there was, in fact, the longest peacetime expansion to that point in history. It wasn't a universal expansion, obviously, just like the even longer expansion of the '90s was not universal (145 companies with at least $1 billion in assets filed for bankruptcy in 1999. Personal and corporate bankruptcies reached an all-time peak of 1.4 million in 1998, at the height of the tech boom. California and parts of the Northeast were still hurting later than other parts of the country due to specific things, such as cutbacks in defense spending, that affected them much more than the rest of the country). And I was trying to point out that there is an accepted definition for a recession, and when we're talking about recessions, we need to use the accepted definition of the term or else we're spreading misinformation. As for an economic slowdown hurting the current President Bush, I don't particularly care. I could think of 1,000 people I'd rather be President (Al Gore not being one of them, though I wouldn't have been particularly peeved had Gore won). If the economy goes into the tank, it's not going to be Bush's fault. If he pays the price in 2004, then so be it. Who the President is doesn't really affect economic matters all that much anyway. (And the older I get, the less conservative I become on other, social issues. By 2004, I may be a full-fledged Democrat for all I know). ------------------ Houston Sports Board The Anti-Bud Adams Page
Well, we obviously have differing opinions on many things, including the economy. I'm glad that civility is ruling the day rather than emotion. Therefore, "slice and dice" as you see fit, but the following are the true, simple facts: My wallet got very thin during Reagan's presidency. I could not get work. My wallet got pretty fat during Clinton's presidency. I got more work than I could handle. I prefer my wallet getting fat rather than getting thin. Now then, are there any questions as to why I believe Clinton helped the economy into prosperity while Reagan drove the country to the brink of bankruptcy? When judging the economy, I use personal experience. I care about the money I make. I couldn't care less what others make. If you say it's all timing, I disagree with you. In my opinion, it has to do with the budget deficit more than anything. Paying down the deficit keeps interest rates low. It's a fact. Low interest rates spur growth in the economy. That's another fact. Bush Senior had to raise taxes. His mistake was opening his mouth in promising not to do so. And, for my Republican friends, here's one: Bill Clinton was a scumbag who couldn't keep his zipper zipped and couldn't keep from lying about it. That is a fact. Furthermore, Bill Clinton, despite being a scumbag with the morals of an alleycat, actually accomplished some good things while President, especially where the economy is concerned. That is another fact. Any questions, or would you just care to, ahem, "slice and dice". Personally, you can slice and dice all you want, but I think your knives are a little dull on this one. On top of it all, if you weren't in the working world while Reagan was President, I really don't care to listen to anything you say, because without experiencing it, you have no earthly idea how tough times were back then, especially in Texas and Houston in particular. ------------------ "Blues is a Healer" --John Lee Hooker
I didn't say anything about Clinton's personal stuff that happened during his Presidency (I didn't care then, I don't care now. And it made me mad that the Republicans became so fixated on those things instead of putting forth their vision of how to make America a better place and acting on it). I also never said that Clinton didn't do good things during his Presidency. I think he did many good things during his Presidency. I would have a hard time not describing the Clinton Presidency as successful. There were many issues that Clinton and I agreed on. And truth be told, Clinton was not too far removed from many Republicans on economic (and some other)issues. The only part I would disagree with you would be on the effect of budget deficits on interest rates (we see interest rates rise and fall without regard for the debt or deficits. The theoretical effect is larger than the actual effect is). But economists disagree on that, so that's not an argument we're going to solve here. And that's a minor disagreement since we both agree that lower interest rates help consumers (and I will note here that interest rates were significantly lower in the '80s than they were in the '70s. So, the Reagan years improved things for a good many people once we got to 1983. But again, I give Paul Volcker most of the credit for that). Personally, I'm tired of arguing about it. We'll agree to disagree and that can be that. ------------------ Houston Sports Board The Anti-Bud Adams Page
I just can't believe this thread has gone on as long as it has without a Simpsons reference. ------------------ Houston Sports Board The Anti-Bud Adams Page
Mr. Paige, we can agree to disagree. And thanks for helping to keep it civil. Now on to the homeless...let's find them all homes! ------------------ "Blues is a Healer" --John Lee Hooker
Mr. Pagige hit the deficit vs. interest rates issue already. We could do another thread at least this long on how the deficit was reduced. But for the comments above, I'd like to add that one of the major reasons the deficit was reduced is because of the economic expansion, not the other way around. Clinton didn't "pay down" anything -- in fact, spending has increased in probably every area of the government but the military. The government's collection of taxes has increased, thanks to the economic growth (and Clinton's tax hikes). Clinton, along with congress, was able to keep spending increases below the rate of tax revenue growth, which reduced the deficit. To Clinton's credit, he did work with congress to create the budgets which eliminated the deficit. ------------------ Stay Cool...
"Don't blame me. I voted for Kodos." "DOH!" There! ------------------ Me fail English? That's unpossible.
Texas isn't the only one that 'took it.' From about 1987 to 1993, there was a real estate bust that rolled from California, Texas, Florida and up into the Midwest. Besides the oil bust in Texas, the real estate bust here was a killer on the economy. And it was worse in California. Because of sharply declining real estate values, a convex interest rate curve (short-term interest rates became higher than long-term interest rates, causing banks that had loans that adjusted infrequently but gave out loans that adjusted frequently -- like adjustable-rate mortgages -- to lose some serious money), a loose federal regulation of S&Ls and some rather unscrupulous and/or risky institutions in that industry caused the real estate bust to create an S&L bust which fed the whole recession of the late-80s. I have some specific knowledge of what happened here and I don't mean to make my argument by inundating you with concentrated information. I wanted to point it out because, while there was economic growth in most of the '80s, there was certainly a recession at the end. If you think there wasn't, you're in a fairy-tale land. And it wasn't just the oil-bust people were feeling here: it was oil, real estate and banking, if not other things as well. On that note, that recession was probably the best thing that could happen to our economy (or at least the rich and the upper middle class), imo. For one thing, it made Congress wake up and clean up the S&L industry (something we are still -- today -- paying for, by the way). For another, I credit the late-80s' downsizing and the efficiencies that created for the prosperity of the '90s. Clinton, Republicans, and Greenspan all like to take credit for this one, but (Gorbachev-lover I may be) I have to tip my hat to the private sector for that one. ------------------ RealGM Rockets Draft Obligations Summary Gafford Art Artisan
Youc an say there was a national recession in the late '80s only if you come up with a new definition of what a recession is. A recession is two consecutive quarters of negative economic growth. That never happened overall in the U.S. in the late '80s. It didn't happen until the early 90s. So, it would appear that every economist in the nation is fooling themselves when they note that there wasn't a national recession in the late '80s because, under the accepted definition of the term, there wasn't a recession in the late '80s. As for unemployment in 1983, that's a direct result of having to drive the economy into recession to combat the stagflation of the late '70s. While Clinton had the good fortune of taking over when the economy was already growing and on its way to a healthy boom time (the policies of the '90s helped to sustain it, but when Clinton took over, he was blessed with an already growing economy), Reagan took over when the economy was in shambles. It took until 1983 to get the economy back on track. The only option other than recession was more stagflation. And the 1986 tax reform act helped push real estate values into the toilet, as well. ------------------ Houston Sports Board The Anti-Bud Adams Page
Mr. Paige...the only thing you failed to mention is that Ronald Reagan did not have to drive the economy into recession in order to fight "stagflation". He did it anyway, because it didn't affect his constituents, who also happen to be Dubya's constituents. Dubya's Dad called it "Voodoo Economics" and he was correct. Now his son is holding the gris-gris bag. If the economy tanks during the next four years, Dubya will be a one-term President just like his Daddy. ------------------ "Blues is a Healer" --John Lee Hooker
