Everyone in the Republican Party knows that Reagan presided over an economy that has never been equalled, before or since. When I was on TV with Rand Paul, he confidently declared
When is the last time in our country we created millions of jobs? It was under Ronald Reagan …
Of course, it’s not true:
There was an even bigger job boom under Clinton than under Reagan, and Obama has now presided over three years of fairly rapid job growth, with the most recent year the fastest since the 90s.
But does this say anything about the presidents in question? Both the Reagan expansion and the Clinton expansion had much more to do with Federal Reserve policy than anything coming from the White House, and Obama’s macroeconomic policy has been hamstrung by GOP opposition almost from the beginning. There are presidents, and sometimes there are job booms when they are president, but the booms aren’t their doing.
But it is nonetheless the case that those Democratic booms vindicate liberal beliefs, while the Reagan boom does not, in any way, validate conservative ideology? Why? Because conservatives insisted that the Clinton and Obama booms were impossible.
I’m old enough to remember the cries of doom when Clinton pushed through an increase in top tax rates. If you were reading the WSJ editorial page, or Forbes, or listening to Newt Gingrich, you knew that it was time to sell all your stocks and wait for the depression.
And Obama, of course, was bringing on hyperinflationary collapse with his health reform and tax hikes at the top.
Needless to say, none of it happened; what the Democratic booms show is that you can strengthen the safety net and raise taxes on the wealthy without causing economic disaster.
But didn’t liberals make similar predictions of Reaganite disaster? Actually, no. As I’ve pointed out in the past, what happened under Reagan — tight money brought on a severe recession, but the economy recovered once money was loosened again, and the intervening period of slack brought inflation down — was exactly what the textbooks predicted.
If politics made any sense, Democrats would be celebrating Clinton in the way Republicans celebrate the blessed Ronald, and they’d be hailing Obama as Saint Bill’s second coming. Meanwhile Republicans would be fairly diffident about a pretty good job but not all that exceptional expansion that was mainly Paul Volcker’s doing, and was a long time ago.