Memo To: Demand-Siders
From: Jude Wanniski
Re: Reaganomics Record
Rich Karlgaard, publisher of Forbes, and easily one of the ten best columnists in our Solar System, has figured out how to express his (and our) appreciation for Ronald Reaganís eight years as President. His December 13 column, "Reaganís Century," begins as an offbeat book review of Dutch, the much-maligned biography of the Gipper by Edmund Morris. Karlgaard wound up reading the book, praising it and recommending it as a holiday gift. This, even though everyone in the political realm who is supposed to be friendly to the Reagan legacy panned the book and denounced Morris. I'm ashamed to say I even wrote a website memo to Mr. Morris, telling him I didn't think much of his book even though I had not read it, but that I would withhold final judgement until I did so. (I'm told I'm getting a copy in my Xmas stocking, so I have restrained my impulse to contact Amazon.) You really should read the entire review at Karlgaard' url -- and make a bookmark so you will not forget to read all his stuff. But I digress... Here is how he celebrates the Reagan contribution:
The Reagan years added $1.4 trillion to the federal debt; that much is fact. But that figure is a teeny blip set against the spike in American asset values, a rise created by the tax-cut boom; i.e., a rise created by Ronald Reagan. When Reagan took office in 1981 the market value of all American assets -- stocks, land, crops, houses, commercial buildings, capital equipment, cars, collectibles, precious metals, etc. -- was about $16 trillion. When he left office in 1989, that number had doubled to $33 trillion. Consider this bump of $17 trillion next time Donald Trump of whoever kvetches about the debt and proposes to wipe it out with a tax hike.
Can you imagine a CEO who would refuse to issue $1 of debt in the knowledge that $12 would come back in asset value? Such a CEO would be an idiot, deserving of a swift kick out the door. Reagan, no fool, never liked deficits but was not unduly troubled by them, either. He pondered his priorities and took out the loan. He simultaneously shattered the Soviet Union and created the conditions for a doubling of American asset values in eight years. For that, Ronald Reagan is the best President of the century. Likewise, for all its flaws, Dutch is a fresh look at this great man.
What Karlgaard does here is give Reagan credit for the harvest resulting from the seeds he planted in his two terms. In other words, the Reagan tax cuts and appointments to the Federal Reserve made possible the booming economy that has followed in the eleven years since his departure. The nation' capital stock in January 1989 had doubled since 198l, which any fool economist knows means that the potential for real gains in American living standards in the post-Reagan years had also doubled. Reagan's Democratic detractors and the elitists in the Republican Party do not want the calculus of his administration to be determined this way. He should get NO credit for everything that happened after the day he turned the keys to the Oval Office over to George Bush. Plus, the Gipper should get ALL the blame for what happened in the first two years of his presidency, after inheriting the ungodly mess left him by Jimmy Carter and his Council of Economic Advisors, his Treasury economists, and the noodleheads Jimmy appointed to the Federal Reserve. Thanks Karlgaard. And Historian Morris: Write that down for your next book. You missed it the first time around.