China Looks to Reagan for Inspiration as it Counters Economic Gloom

[Frodo]

Xi Jinping’s Remedy for China’s Economic Gloom Has Echoes of Reaganomics

By CHRIS BUCKLEY
MARCH 3, 2016

BEIJING —

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[Beet]

They've been talking about structural reform for three and a half years now and done very little; that is one of the reasons why the economy is struggling. Besides, now they have more short-term problems to worry about, such as the currency exchange rate.

[Citizen Hats]

The systematic problem with structural reforms is that policy makers only get around to them after sh**t's hit the fan

[MASHED POTATOES. VOTE!]

This must be a Russian false flag operation to undermine the Chinese economy.

[RFayette]

My opinion is that Reaganomics worked well for its time - in the late '70s, we had a period of high inflation, punishing tax rates, and heavy regulations.  It was quite successful in the '80s, but attempts to revive it in the 2000's proved, err, less successful.  Whether China is currently in a late '70s or early '00s type situation, I'm not sure, but it strikes me as a decision to be careful about.

[136or142]

My opinion is that Reaganomics worked well for its time - in the late '70s, we had a period of high inflation, punishing tax rates, and heavy regulations.  It was quite successful in the '80s, but attempts to revive it in the 2000's proved, err, less successful.  Whether China is currently in a late '70s or early '00s type situation, I'm not sure, but it strikes me as a decision to be careful about.

I have to disagree with you there. What worked in the 1980s was not Reagan's policies, but Volcker's attempts to curb inflation. The high interest rates set by the Fed saved us from inflation, and then the economy could expand from recession regardless of what Reagan did.

What Reagan believed is he could increase supply and get the economy back on track. What actually happened is demand decreased with the high interest rates, cutting inflation. Then, with the tech boom of 1990s, we finally had a strong economy, albeit with problems.

I don't have that negative opinion of all of Reaganomics.

1.Deregulation, started under Carter, was, to some degree, an idea that matched the times and technology given that, for instance, until Reagan it was civil servants at the FAA who decided the start time of airplane flights and also, which airplanes could fly out of which airport.

If nothing else, that is obviously a situation where firms would likely try to engage in regulatory capture.

Both of those things obviously hampered free market competition and with the dramatic reduction in the price of computers in the early 1980s, that was something that could best be left up to the market.

Obviously much of the deregulation that cut back on health and safety protections I don't agree with.

2.In regards to privatization, I believe a report asked for by the Carter Administration showed that if government entities were regarded as private businesses, that the government would be said to own more than 20,000 separate businesses. This seems completely unwieldy to me.  

3.In regards to the tax cuts, I think a case could be made that the highest marginal brackets could be lowered to bring in more revenue and spur more economic growth, but obviously the Reagan Administration wasn't interested in finding that level, but mostly just wanted to cut the top bracket on the highest earners as low as they could reasonably get away with at the time.


On the other side, there is no question that the Reagan Administration embraced and even created the 'greed generation' of the 1980s that followed the 'me generation' of the 1970s.  When Gordon Gecko said "Greed is good" in the movie "Wall Street" tens of millions of Americans did not understand that that was meant to be a critique of Wall Street and of the U.S in general, but agreed with the comment.

[RFayette]

My opinion is that Reaganomics worked well for its time - in the late '70s, we had a period of high inflation, punishing tax rates, and heavy regulations.  It was quite successful in the '80s, but attempts to revive it in the 2000's proved, err, less successful.  Whether China is currently in a late '70s or early '00s type situation, I'm not sure, but it strikes me as a decision to be careful about.

I have to disagree with you there. What worked in the 1980s was not Reagan's policies, but Volcker's attempts to curb inflation. The high interest rates set by the Fed saved us from inflation, and then the economy could expand from recession regardless of what Reagan did.

What Reagan believed is he could increase supply and get the economy back on track. What actually happened is demand decreased with the high interest rates, cutting inflation. Then, with the tech boom of 1990s, we finally had a strong economy, albeit with problems.

Both worked in tandem.  We achieved booming economic growth by '84 in tandem with constrained inflation.  Reagan did this by shifting aggregate supply to the right, through deregulation and business tax cuts, which grows the economy without growing inflation.  I agree Volcker played a big role in constraining aggregate demand to tamp down inflation, but both forces played in tandem to produce the robust '80s economy, along with the military buildup.  My concern is that we followed a relatively similar policy prescription in the 2000's and the results were nothing like what we had in the '80s.  So I tend to feel that Reaganomics was positive in that situation for that era, but no longer (my current belief is we should go more nationalist/Trumpist on economics at this point in time).

[OSR stands with Israel]

My opinion is that Reaganomics worked well for its time - in the late '70s, we had a period of high inflation, punishing tax rates, and heavy regulations.  It was quite successful in the '80s, but attempts to revive it in the 2000's proved, err, less successful.  Whether China is currently in a late '70s or early '00s type situation, I'm not sure, but it strikes me as a decision to be careful about.

I have to disagree with you there. What worked in the 1980s was not Reagan's policies, but Volcker's attempts to curb inflation. The high interest rates set by the Fed saved us from inflation, and then the economy could expand from recession regardless of what Reagan did.

What Reagan believed is he could increase supply and get the economy back on track. What actually happened is demand decreased with the high interest rates, cutting inflation. Then, with the tech boom of 1990s, we finally had a strong economy, albeit with problems.

Both worked in tandem.  We achieved booming economic growth by '84 in tandem with constrained inflation.  Reagan did this by shifting aggregate supply to the right, through deregulation and business tax cuts, which grows the economy without growing inflation.  I agree Volcker played a big role in constraining aggregate demand to tamp down inflation, but both forces played in tandem to produce the robust '80s economy, along with the military buildup.  My concern is that we followed a relatively similar policy prescription in the 2000's and the results were nothing like what we had in the '80s.  So I tend to feel that Reaganomics was positive in that situation for that era, but no longer (my current belief is we should go more nationalist/Trumpist on economics at this point in time).

The reason Reaganomics worked in the 80s and 90s was because in the 60s and 70s taxes rates had gone to high, regulations were too high and too much meddling by the government , and when reagan reversed those things the economy was able to boom. Plus we had a responsible fed who didnt let a bubble grow.

 In the late 90s important regulations from the 30s were reversed which didnt get reversed under reagan and greenspan kept interest rates low despite bubbles forming  in the tech, and housing sector which eventually crashed the financial system in 2008.