Truthdig: The Death of Reaganomics

The Death of Reaganomics


Posted on Jul 10, 2008
By E.J. Dionne

The biggest political story of 2008 is getting little coverage. It involves the collapse of assumptions that have dominated our economic debate for three decades.

Since the Reagan years, free-market clichés have passed for sophisticated economic analysis. But in the current crisis, these ideas are falling, one by one, as even conservatives recognize that capitalism is ailing.

You know the talking points: Regulation is the problem and deregulation is the solution. The distribution of income and wealth doesn’t matter. Providing incentives for the investors of capital to “grow the pie” is the only policy that counts. Free trade produces well-distributed economic growth, and any dissent from this orthodoxy is “protectionism.”

The old script is in rewrite. “We are in a worldwide crisis now because of excessive deregulation,” Rep. Barney Frank, D-Mass., the chairman of the House Financial Services Committee, said in an interview.

He notes that in 1999 when Congress replaced the New Deal-era Glass-Steagall Act with a looser set of banking rules, “we let investment banks get into a much wider range of activities without regulation.” This helped create the subprime mortgage mess and the cascading calamity in banking.

While Frank is a liberal, the same cannot be said of Ben Bernanke, the chairman of the Federal Reserve. Yet in a speech on Tuesday, Bernanke sounded like a born-again New Dealer in calling for “a more robust framework for the prudential supervision of investment banks and other large securities dealers.”

Bernanke said the Fed needed more authority to get inside “the structure and workings of financial markets” because “recent experience has clearly illustrated the importance, for the purpose of promoting financial stability, of having detailed information about money markets and the activities of borrowers and lenders in those markets.” Sure sounds like Big Government to me. .....(more)

The complete piece is at: http://www.truthdig.com/report/item/20080710_the_death_of_reaganomics/

Same will be said for the end of anything this regime has created.

The more we learn about problems with corporatism, the more we know raygun was the first puppet, although Nixon's greed starting the HMO's got the puppeteers thinking!

Raygun changed our economy from demand & supply to supply & demand which caused credit companies to love people buying things that were supplied and not demanded thus raising debt in both the consumer and then government coffers.

Then Dubai will buy them out. I welcome our new overlord - Sheikh Mohammed bin Rashid Al Maktoum.

n/t

The fools that voted in Saint Reagan will never get it either way. And they probably won't suffer the consequences of this as much as others. Awesome.

No one who proposed "trickle down" ever believed it would actually work that way. In truth, reaganomics worked perfectly as designed and we are seeing the results now.