Reagan Defeated Inflation

Here is a bit from economist and pundit Robert Samuelson to reinforce my post about Ronald Reagan.

One reason Reagan receives so little credit for [inflation's] collapse is that Paul Volcker's Federal Reserve did the hard labor. Through sky-high interest rates, Volcker engineered a savage recession. Housing and auto sales collapsed. Unemployment rose to 10.8 percent. Reagan's role was to provide the political support that allowed Volcker to maintain the squeeze long enough to purge inflationary psychology. Companies and workers had to learn that outsized price and wage increases would result in bankruptcy and unemployment. If the Fed had relaxed prematurely, inflation would almost certainly have revived and exceeded its previous peaks.

No other possible president at the time, Democrat or Republican, would have so steadfastly supported Volcker. Reagan faced enormous pressure from both Republicans and Democrats to push the Fed to relent. He was vilified in the press; his approval rating fell to 35 percent. Reagan and Volcker, though lacking a close personal relationship, did share a common conviction: America could not thrive with high inflation. "Unlike some of his predecessors," Volcker later remarked, "he had a strong visceral aversion to inflation."

Without Reagan, Volcker would have failed

Samuelson goes on to frustrate both liberals and conservatives. I am guessing he is right across the board. He confirms nonetheless my opinion about Reagan's greatness.

Comments

[conservative]

Paul Ryan is about as conservative as Reagan...talks about it but he increased the size and role of Govenrment with his Big Government votes in Congress.

Read this article
http://www.wtffinance.com/2011/02/paul-ryan-another-%E2%80%9Cconservative%E2%80%9D-hypocrite/

It's interesting because there are so many similarities between this guy and Reagan...both can talk well but they sure don't deliver. Of course now that Obama is in office Ryan is conservative again...until he advances his political career and then back to his old tricks..

[Donald Pay]

There wasn't a coherent economic policy during the Reagan administration, so the fed ran the show. Reagan was pretty limited in his understanding of the economy, and his economic team had differing views. The tax cutters were at war with the budget cutters.

[Ken Blanchard]

Donald: you have no clue what you are talking about. Every administration has such "wars". It's the job of a President to decide which side wins. Reagan did that.

[larry kurtz]

Ronald Reagan's legacy will alway be viewed through the lens of the Iran-Contra scandal. He raised taxes like a socialist:

http://www.npr.org/2011/02/04/133489113/Reagan-Legacy-Clouds-Tax-Record

[KB]

Larry: no, it won't. Iran-Contra has been largely forgotten already. Suggesting that that is more memorable than the fall of the Berlin Wall suggests a deeply jaundiced imagination.

Bill Clinton and the cigar however...

[Jimi]

Larry,

"He raised taxes like a socialist"

No...he was a Net Tax Cutter.

Rates in 1980 for Single
0.0% $0 $2,300
14.0% $2,300 $3,400
16.0% $3,400 $4,400
18.0% $4,400 $6,500
19.0% $6,500 $8,500
21.0% $8,500 $10,800
24.0% $10,800 $12,900
26.0% $12,900 $15,000
30.0% $15,000 $18,200
34.0% $18,200 $23,500
39.0% $23,500 $28,800
44.0% $28,800 $34,100
49.0% $34,100 $41,500
55.0% $41,500 $55,300
63.0% $55,300 $81,800
68.0% $81,800 $108,300
70.0% $108,300

Rates in 1988 for Single

15.0% $0 $17,850
28.0% $17,850 - (a)

(a) A 33% "rate bubble" applied between $71,900 and $149,250 for married filing jointly, between $35,950 and $113,300 for married filing separately, between $43,150 and $89,560 for singles, and between $61,650 and $123,790 for heads of households, the purpose being to recapture the revenue that upper-income taxpayers had saved by applying the 15% rate.
http://www.taxfoundation.org/publications/show/151.html

[Mark Anderson]

Volcker was appointed by Carter in 1979. I know it ails any conservative to give Carter's "failed" presidency credit for anything, but perhaps you could overcome this shortcoming. After his success Volcker was let go by Reagan in 1987.

[Golfvarusteet]

It definitely sounds as if Samuelsson is all over the place..