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Why Ronald Reagan Is Rolling In His Grave: The Keynesian Putsch At The Fed
Submitted by David Stockman via Contra Corner blog,
Ronald Reagan is surely rolling in his grave. He is credited for much that he didn’t actually accomplish on the economic front, but his most singular real victory - decisive repudiation of the Keynesian macro-economic policy model that had produced stagflationary havoc for more than a decade - overshadows all his fiscal failures and the urban legend that he actually tamed Big Government.
Needless to say, however, that 35-years ago repudiation has now been itself completely repudiated by the keynesian apparatchiks who presently rule the Eccles Building. This week Janet Yellen was at it again, displaying outright contempt for the Gipper’s crowning achievement.
To that end, she announced that interest rates will remain pegged at zero until at least September. That is, the Fed will continue to dispense free money to Wall Street gamblers for what will now be 80 months running.
This lunacy is purportedly necessary to accommodate economic recovery, even if it does fuel the fires of financial speculation. Indeed, one of the Fed’s faithful MSM flaks, Greg Ip of the Wall Street Journal, said as much in a hot off the press column obviously written in the Eccles Building:
There is certainly ample evidence that low rates have fueled speculation, such as higher home and stock prices……This, however, is not automatically a reason to raise rates. The Fed must weigh the benefits of lower unemployment against the probability and potential severity of a (financial) crisis later.
Yes, indeed. This kind of semi-coherent jabbering was front and center during yesterday’s presser by the school marm who has become the nation’s financial suzerain. The fact that it was applauded by Wall Street and Washington alike baldly demonstrates that Reagan’s victory over keynesianism has been wholly reversed. And in the most dangerous manner imaginable.
To be specific, the old-style “fiscal Keynesianism” was rejected fair and square by the process of political democracy. This was the core issue of the 1980 and 1984 elections—-a referendum that was reinforced again and again by the Congressional fiscal policy deliberations of the Reagan era.
Yet during the subsequent decades—–beginning with Alan Greenspan’s appointment to the Fed in 1987—this anti-Keynesian verdict was subverted by conversion of its demand management doctrine to a central banking based modality. The latter gussied-up version of demand management was then migrated to the Eccles Building—— safely out of the reach of the democratic electorate.
In this new domicile, the Keynesian professors and monetary policy apparatchiks, along with their Wall Street henchmen, have seized the levers of power, functioning as unelected monetary gauleiters. That Yellen & Co believe they are in charge of virtually everything on the main street economy and that their writ—-based on nothing more than their own subjective and unexplained wisdom—-now reigns supreme could not have been better expressed than by this ukase from the Fed chair person herself:
“Obviously we have to look at the pace of job creation, we have to look at what’s happening to labor force participation, to part time employment for economic reasons, to job openings, to the pace of quits, to wage inflation and other indicators of the state of the labor market. I did say when we agreed that labor markets slack has diminished to some extent, in the inter-meeting period and clearly over a longer span of time over the last several years, obviously we have made considerable progress in moving towards our goal of maximum employment. So in spite of the fact that there is some progress on that front the committee wants to see some further progress before feeling that it will be appropriate to raise rates.”
That’s right. Yellen averred that she and her posse are in charge of everything, including the status of part-time hot dog vendors and the rate at which ambitious job seekers elect to depart their current employers for greener pastures. Once more, in monitoring every feather on the economic sparrow’s back, they claim the unfettered right to keep shoveling free money to their Wall Street vassals until they get the “feeling that it will be appropriate to raise rates”.
This is unaltered Keynesian claptrap. It is the arrogant over-reach of a model-obsessed academic zealot who has no respect whatsoever for the real main street economy and for the historically proven truth that free markets are the best route to prosperity and higher living standards for the people, not the dictates of central planners.
In claiming the power to manage the microscopic details of the nation’s $18 trillion economy by the month and by the yard, the Yellen Fed has now gone beyond merely instituting some misbegotten labor economist’s version of Keynesian demand management. In fact, when it gets down to insisting that the PCE deflator must rise by at least 2.0%, not 1.4%; or that there is a meaningful difference between 5.5% and 5.2% on flawed metrics like the U-3 unemployment rate; or that the globally impacted trends like the rate of hourly and weekly wage growth are still a few decimal points too low—–what you actually have at that point is an economic putsch.
To be sure, this insanity is being pursued in the name of the so-called “dual mandate” of the Humphrey-Hawkins Act, but that’s exactly the point. The Act is utterly content-free and represents a vague Congressional aspiration in favor of jobs, prosperity, stable prices and motherhood and apple pie, too.
That the power-hungry fanatics who run the Fed have no sense of practicality and self-restraint, and, instead, believe the Act empowers them to target decimal points worth of noise, and to do so in a manner which self-evidently enriches the tiny slice of America which owns most of the financial assets, is nothing less than an unconstitutional usurpation.
Likewise, this same fanaticism is crushing savers and confiscating their wealth and property—–even as these Keynesian central bankers aver that it is all being done for the “common good”. Bernanke never tired of asserting that gibberish.
In the same manner, debtors are being offered explicit government subsidies because that is exactly the purpose of interest rate pegging and repression. That enterprise in wanton redistribution has been falsely explained as the price of “recovery” over and over by Yellen & Co, as well.
And worst of all is the “wealth effects” doctrine and the explicit policy of propping up the stock market in order to make the people feel wealthier and spend more money. That’s “trickle down” economics with malice of forethought. Indeed, Ronald Reagan was pilloried for getting a democratically approved tax cut that makes Yellen’s massive gifts to the wealthy pale into insignificance.
In short, the entire Keynesian central banking model is a sweeping exercise in fiscal policy and a deliberate, massive redistribution of wealth and income orchestrated by the state. It amounts to an economic coup d etat by any other name.
The plenary power over the US financial system and main street economy that our monetary politburo now claims makes the NRA/Blue Eagle statism of FDR’s New Deal—- that was struck down by an old-fashioned Supreme Court in 1935—-look tame by comparison.
That’s why democratic repudiation of fiscal Keynesianism during the Reagan era is so important to recall. Those long ago events help to shine a spotlight on the sweeping fiscal actions of today’s Fed by comparison; they also demonstrate, as an empirical matter, that the rationale for the Fed’s current suffocating intervention is completely bogus.
To wit, Reagan’s anti-Keynesian fiscal policy proved beyond a shadow of doubt that the US economy is not some kind of fragile macro-economic flower incapable of coping with honest interest rates and market-determined financial prices; that it does not have a death wish and tendency to circle the drain of recession and depression; and that with no helping hand from the state at all, it is capable of rebounding vigorously from any punishment the latter may have administered——once “policy” gets out of the way.
Listening to Yellen’s pathetic double talk and paternalism, you would never know that the US economy went through the wringer of the worst recession (at that point) since WWII. But then it promptly rebounded on its own hind legs once the fevers of inflation and speculation were quelled.
Never once did the Reagan White House table any “stimulus” measures or gum about the shortfall of “aggregate demand” or promise to close the “potential output gap” or claim that the job of the state was to ensure “full employment”.
In fact, the Reagan Administration’s policy stance was so thoroughly anti-Keynesian that it enacted a huge tax increase—the equivalent of $350 billion per year in today’s economy—- at the dead-bottom of the recession in mid-1982.
The purpose was long term fiscal stability and sustainability. Even Tip O’Neill, who was crucial to its passage on Capitol Hill, did not get himself all twisted up about the “contractionary” nature of this action. Nor did even a peep to that end emanate from a certain junior economist on the White House staff by the name of Paul Krugman!
The point is, the Reagan era economic policy actions were based on enabling the supply side of the US economy to thrive over the long-haul by minimizing barriers to enterprise and work.
That was the motivation for the original 25% cut in marginal tax rates in 1981. And when a bidding war caused the tax reduction bill to balloon to nearly double its intended size (6% of GDP versus 3.5%), the threat that permanent giant deficits would consume too much of the nation’s investable savings supply was also the basis for the corrective tax increases of 1982-1984.
Yes, there were large fiscal deficits during that period. But they were not predicated on Keynesian “stimulus”. Instead, they were the unintended consequence of an out-of-control defense build-up, too much tax cutting to placate the K-street lobbyists in order to enact pro-growth supply side tax cuts and too little courage and too few votes among the GOP rank and file on Capitol Hill for real shrinkage of the domestic welfare state.
I explained this in more detail in The Great Deformation, but what stands out is this. The great Paul Volcker did not “accommodate” the Reagan deficits and therefore they were not monetized; they competed for available savings. The “accommodation” came years later when push game to shove in an overheated economy and Alan Greenspan opened up the money sluices in order to keep himself in the good graces of the politicians in the White House and on Capitol Hill.
In fact, Volcker proved that Yellen & Co are essentially sniveling cowards who are petrified that Wall Street will have a hissy fit if even a semblance of true market forces are allowed to express themselves in the money and debt markets. By contrast, notwithstanding crashing commodities markets, soaring unemployment and a vast so-called full employment gap in 1981-1982, Volcker courageously permitted money market interest rates to clear in the manner shown below.
That’s how it’s done. Yet the clowns now resident in the Eccles Building are already tweaking their ludicrous “dot plots” so as to keep money market rates pinned to the floor-board nearly as far as the eye can see:
Needless to say, letting the money market clear and the speculative excesses built-up in the structure of wages, prices and costs over the course of a decade to be purged did not send the US economy spiraling down the drain. Instead, even with real interest rates at positive 5% on the 10-year treasury note, the main street economy healed rapidly and never looked back. During the 72 months after the July 1982 bottom, real GDP grew by 30% and jobs by 18% or by 3X more than the pick-up during the last 72 months.
What is the difference between the commodity/wage/CPI inflation back then and the massive financial asset inflation this time around? Ultimately, not very much since both are the destructive economic and financial deformations emitted by the central bank’s printing presses.
What is different is that back then we had a chairman who did not believe that the Fed’s remit encompasses the micromanagement of everything that moves and everything that stands still in the vast expanse of the US economy; and also a thoroughly anti-Keynesian President that backed him all the way in his steely resolve to restore a stable economy based on sound money.
Needless to say, during the numerous sessions in the oval office that I witnessed on these matters, never once did I hear either of them express a worry that American capitalism was so frail that it would any day plunge into a black hole absent 24/7 stimulus by the fiscal and central banking branches of the Federal government.
That particular dogma is the delusion of the Keynesian school marm who now runs the world’s most dangerous financial Ponzi. And owing to her self serving tommyrot , the gamblers and 1 per centers got another bountiful windfall in today’s casino action.
Yes, Ronald Reagan is truly rolling in his grave.
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I wonder if Reagan would do a double roll over if this pans out:
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“Ezekiel tells us that Gog, the nation that will lead all of the other powers of darkness against Israel, will come out of the north. Biblical scholars have been saying for generations that Gog must be Russia. What other powerful nation is to the north of Israel? None. But it didn’t seem to make sense before the Russian revolution, when Russia was a Christian country. Now it does, now that Russia has become Communistic and atheistic, now that Russia has set itself against God. Now it fits the description of Gog perfectly.”
~Gov. Ronald Reagan, 1971 Cali.
Keynesian claptrap or not, Yellen appears to have taken the first step towards ACTUALLY RAISING rates in September...
Yellen is a bigger Dove than most realize...by raising rates she is attempting to stoke inflation by forcing banks to loan out all the cash they've been hoarding since 2008, and forcing a big increase in VELOCITY
I love stockman, but enough of defending Reagan. He was a big believer in Keynesism, military Keynesism. That's a big reason he was able to TRIPLE the national debt in 8 years. He may have said a bunch of libertarian things, but he did none of then. Like his promise to end the dept of education went away, and not only did he never end it, he gave it a bigger budget each and every year. There are other examples, a lot of them.
He was no friend to or fan of small government. Quite the opposite.
And I am still surprised how otherwise intelligent commentators dont understand that this play is EXACTLY what they want. Sink the world so deep in debt that the Tribe can suck the Goy dry when they decide they have total control and turn up the interest rates. You'll ALL be slaves to the banks and the Tribe.
Wow Stockman turns himself into a really bizarre contortionist with this one, article makes no sesne as defence of reagan. Basically the final claim is that reagan moved the welfare state to defence and finance, tried to pay for it via massive tax inceases yet still had ballooning deficits and then brought in greenspan to paper over things.. more or less the same fed policy as today. That was all somehow anti keynes of reagan? wtf?
In fact, the Reagan Administration’s policy stance was so thoroughly anti-Keynesian that it enacted a huge tax increase—the equivalent of $350 billion per year in today’s economy—- at the dead-bottom of the recession in mid-1982.
That was the motivation for the original 25% cut in marginal tax rates in 1981. And when a bidding war caused the tax reduction bill to balloon to nearly double its intended size (6% of GDP versus 3.5%), the threat that permanent giant deficits would consume too much of the nation’s investable savings supply was also the basis for the corrective tax increases of 1982-1984.
Yes, there were large fiscal deficits during that period. But they were not predicated on Keynesian “stimulus”. Instead, they were the unintended consequence of an out-of-control defense build-up, too much tax cutting to placate the K-street lobbyists in order to enact pro-growth supply side tax cuts and too little courage and too few votes among the GOP rank and file on Capitol Hill for real shrinkage of the domestic welfare state.
The “accommodation” came years later when push game to shove in an overheated economy and >>>> Alan Greenspan opened up the money sluices in order to keep himself in the good graces of the politicians in the White House and on Capitol Hill. <<<<
Yet during the subsequent decades—–beginning with Alan Greenspan’s appointment to the Fed in 1987 [subsequent decades and oh also when reagan was in office..]
Well hey, let's not forget about Art Laffer, folks. He's still very much alive and has plenty to say about this fucking insanity.
Who do you think created "Reaganomics"?
But realistically, nothing can save us at this point no matter what we do.
America's manufacturing base has been completley destroyed. Never to come back again. We have been absolutely dismantled since Reagan, and now its just a matter of these scumbags to mop up what little is left, replace us with hi-tech and Mexicans, and kill the dollar.
Game over pretty much until after the collapse and/or a significant revolution to once again wipe out the tyranny and corruption and start over again Constitutionally to rebuild from the ashes.
You mean wipe out the present tyranny and replace it with another brand of tyranny that initially doesn't look like tyranny.
Dude, you drank the kool aid.
Wouldn't it be great to have video of David Stockman reading this in front of the Eccles building? It would have hundreds of thousands of hits and solidify his reputation as one of the most informed and thoughtful critics of current monetary policy, with an unmatched historical perspective. I'm so glad Zerohedge is re-posting his current burst of writings.
If you want comments about Regan's economic policies, you should read Paul Craig Roberts, who ran them.
http://www.paulcraigroberts.org/
I like Stockman but why does he give a pass to the Gipper and his Administration?
Chock full of liars and criminals....Bush, Meese, Weinberger, Watt, etc...not to mention the hundreds of billions going to the MIC which led to massive deficits and trillions in debt that have never really changed course since. Reagan and his crew were no hero's, that's for sure.
https://en.wikipedia.org/wiki/Reagan_administration_scandals
As to the MIC spending, communism was worse, much worse than Keynesianism. We got something for all that spending: the end of the Soviet empire. Currently we are running up debt as if there has been a war on. But we haven't had a sizeable war since Vietnam, and that was tiny compared to WWII, which was an all out effort that ran debt to GDP to the extreme levels we have now bathing in unprecedented peace and prosperity.
As to the MIC spending, communism was worse, much worse than Keynesianism. We got something for all that spending: the end of the Soviet empire.
The delusions are strong with this one.
It was Stockman himself who said that the increase in MIC spending under Reagan was wrong and was not necessary to bring down the USSR. The Soviet Union would have collapsed anyway. So we got a lot of people rich for nothing.
Why doesn't he say that in the article then? I see 7 dumbfucks above cannot connect the dots on this subject either.
If they have an actual point or argument to make, why not state it instead of being chickenshit junking trolls?
Even though we can debate foreign policy and the evils and dangers of MIC, at least that was largely domestic spending, and while we are all suffering from the incredible weight of unproductive government overhead, what we have now is far worse than simple wasteful spending. We have trade and tax policies that are destroying our economy and society.
I have a safe full of guns and ammo, and with any luck it was ALL wasteful spending, but at this point of our economy a huge portion of ALL of our spending is ultimately wasteful if thought about in its true utility value. Our houses are far larger and luxurious than we need, and don't get me started on our food. My point is that our real challenge is policies that destroy our businesses and jobs.
It is obvious to me now as it was then that Reagan's policies definitely fostered growth in American jobs and our overall economy. If we wasted money on MIC, at least we didn't waste our economy.
All debt is not equal. If I borrow money for hookers and blow is not the same as borrowing for productive gains. In Reagan's time we had debt supporting growth. today it's all hookers and blow...not the same. We can look at China which has incredible levels of debt, but it is almost all internal because they are a net seller, not buyer of production. Further, even considering the cases of incredible waste, China has spent its debt on CHINA, on building infrastructure and creating factories and a massive military, which as America understands is an important component of world politics and economic issues.
raygun was a borrow and spend fascist and crony crapitalist just like all the rest
Reagan had to deal with a DEMOCRAT congress. The tax and spend bunch. Remember govt 101, president proposes, congress disposes. All spending starts and stops in Congress. Those are the facts
I do believe that many old timers here on this website will be surprised when they discover that QE worked this time around.
Now with that said, it does not guarantee that it will work every time.
I believe that RR would be open minded enough to see the success and admit to it.
Worked for who? I do believe you are an elitist ass wipe. Tell that to your fellow 1% er's. Also, please let them know there are definitely enough lamp posts to accomodate the impending need thereof. After you have accomplished this task, you are cordially invited to eat shit and die.
Toolshed! That was uncalled for. Please no personal attacks ok? Let's have a nice discussion.
Ta ta ta ta da DAAAAA! PUPPY POWER!
This is fight club you fucking moron. What you really need is a swift kick in da nuts...
http://www.youtube.com/watch?v=0_C2HJvtRDY
Pay particular attention to the last verse.
"If we can count on you Scooby Doo
I know we'll catch that villian"
Yellen, Bernanke, & Greenspan would have gotten away with it if it weren't for you meddling kids!
LMFAO!!!! Then raise rates and normalize the Fed's balance sheet you stupid fuck. Worked for whom exactly?
QE is in fact a "let the majority eat cake" monetary experiment. The French already tried it, and this time it will turn out no differently.
What is the difference between the Fed selling debt to bring inflation under control, and the Treasury issuing fresh debt? Not much, other than the Treasury can go spend that money on things to "prime the pump." They soaked up all that surplus money with government debt and blamed inflation on those who wanted more money, not those with more than they knew what to do with.
They have been running up the tab ever since and now the world is awash in surplus money everywhere but in the actual economy.
The consequence is they have cooked the goose.
Time to push the reset button.
Remember GHW Bush called it "voodoo economics" during the campaign of '80. He might have turned out to be a patsy, but at least he knew what was going on.
"What is the difference between the Fed selling debt to bring inflation under control, and the Treasury issuing fresh debt?" -- far LESS useless fucking middlemen!!!!
Remember, money creation in "modern finance" does not require any real collateral.
YES, bankers and financiers are now nothing but useless middlemen between the printer/computer and the producer/consumer in the real economy. Hey, I have a printer/computer, I think I will just compensate myself whatever I want like the world's bankers and financiers.
Sooner than people think the producers of the world will stop accepting all bullshit paper promises.
same as it ever was....
What is key is when does the IRS stop accepting that paper? (which isn't likely to happen until it stops, altogether)
The IRS is like every other government agency now. Not everyone is treated the same. Besides, like greece, "taxes" really do become irrelevant once the majority of people have nothing to tax.
It's sort of like issuing a ticket to a homeless guy who is caught fishing without a license. He wins, because he gets a whole bunch of free services at the country jail thanks to the taxpayer...
He wins, because he gets a whole bunch of free services at the country jail thanks to the taxpayer...
Don't believe that meme LawsofPhysics. Freedom is priceless. Our jails and prisons are never worth residing in, no matter how desperate your plight. To ever believe otherwise is to take the Blue Pill at 1000x the reccomended dosage. Freedom of movement and action is the most important thing in life. Besides, just residing in the USA has become near enough experioence to being jailed as it is...
You need to do more thinking. It is backed by public debt. Money is a contract, however it is backed. Gold backed means it is worth a certain quantity of gold. Public debt backed means it is a lien on the public purse. There are two ways to eventually pay it off, though taxes on future generations, or selling public property. When you find every road you drive down is a toll road belonging to some private equity firm, you will understand how it functions as a siphon for wealth extraction.
What you will find is that which cannot be sustained, won't be, period. Toll road or not. LOL!!!!
Exactly, but these are very linear people. They don't understand blowback until it blows up.
The supreme irony is the financial bubble is monkey wrenching the industrial economy, which makes the bankers unwitting accomplices of radical environmentalism.
Mother Nature has a sense of humor.
So what else can Yellen do? Let the market fail and with it every pension plan in the world?
The whole world is facing a meltdown unlike any before. Yellen is just doing what people want....keeping the system going one more day.
I don't like it and I'm ready for whatever....but for most of the Western world, if Yellen stops....they begin eating out of garbage cans. The alternative to her action is just not acceptible to most people even if they know what she is doing is helping big bankers and destroying the economy.
We are screwed. In the long run what she is doing won't matter but I don't expect any power on earth to stop her. She'll continue until we get hyperinflation or something unexpected happens.
Ron Paul's call for a market collapse can't happen in this environment. Policy will allow the purchase of all debt with Fed cash even as that cash becomes worthless. I say we see Zimbabwe before we see a 10% market drop.
Reagan tripled the national debt, set the stage to deregulate the banks and put Greenspan at the fed. Disasterous!!!
Excellent point. Greenspan seemed like a good bet at the time but in retrospect not so much, in retrospect he failed, or worse his interventions only made things worse. Well, not every move is a winner. The question is what do we do now.
you need to put the Debt in context as a percentage of the economy. By that measure, it was not huge. What is gargantuarn is today's debt.
I'm confused. Isn't Reagan the guy who took the US from the biggest creditor nation in the world to the biggest debtor nation during his eight years in office?
Yes but when that money is spent on MIC it's called supply side economics. When the money is spent on poor people it's called socialism.
I should add - we are long past the point where we can afford to do either.
"Ron Paul's call for a market collapse can't happen in this environment. Policy will allow the purchase of all debt with Fed cash even as that cash becomes worthless. I say we see Zimbabwe before we see a 10% market drop."
The inflation/deflation cycle completes itself in deflation.
Come off it David, Reagan's greatest legacy was tripping of the size of the MIC, closely followed by an explosion of easy credit and debt post 1982 as cocaine money flooded bank vaults, with associated and overprinting viscous central American guerrilla warfare whilst Washington was secretly selling advanced weapons to Tehran, as radical debt-growth, due drug money laundering, masqueraded as 'GDP growth', until this day.
The Stockman says:
Somebody throw a bucket of water on the poor sod, I think his thesaurus is overheating.
But he's right. And this is actually the best article I think I've seen from Stockman.
Again overheated, but right. In fact, I think Stockman has just now changed my take on Yellen and the whole deal. This "feeling" business ... well, maybe it's just cowardice to move. Not that Yellen and the Fed aren't actually more intrusive today than ever before. She's just afraid to change direction.
Good stuff, Dave. But just one thing, there's really very little Keynes in this, Keynes himself might turn white and faint at this kind of fantastical theory and the daily, ongoing interventions we still have no real information on.
Utterly bizarre. Volcker didn't "permit" anything; he raised interest rates. I don't understand the Austrian/goldbug notion that government-enforced high interest rates are somehow more market-oriented than government-enforced low interest rates. That's goofy.
Morever, Volcker faced a dramatically different situation than today. Inflation was dangerously close to running out of control by the end of the 1970s. Volcker raised rates to break inflation, which in fact caused the 1981-1982 recession. Once inflation was broken, he lowered rates dramatically (though obviously nowhere near as low as today). Today, despite years of ZIRP and QE, inflation doesn't even break 3%. Whatever the Fed actually ought to be doing, it makes no sense to have the same monetary policy as in 1980. The situations are too different.
One other thing to note, oil was $107/bbl in 1980 (in 2015 dollars). The price declined 70% to $31/bbl in 1986, rose to $36 in 1987, and dropped back to $30 in 1988. That's a massive stimulus.
Today, despite years of ZIRP and QE, inflation doesn't even break 3%
You must not eat or pay rent much bro... Inflation is killing food and shelter affordability, especially if you (like most people) live near a metro.
2200 History book Reagan will be known as the greatest Republican Socialist poser President ever.
Obama will be known a acrony Socialist corporate douchbag and the Bush's and Clintons are just a creepy family corruption narrative legacy of Reagan.
at least Regan put bankers/financiers in fucking prison the first time they tried to break 200+ years of contract law, that's all I give him credit for.
Every president has gotten progressively worse and more corrupt you stupid fuck. FYI, the world is always at war, evolve or die.
William Black says otherwise..
Feb 7, 2011 - William K. Black: Reagan obstructed prosecutions against a wave of fraud.
Bankers still went to prison. Again, remind me how many of Tim Geithner's arsonists have gone to prison?
No one is saying they didn't. Your statement above said Reagan put them in prison. A tad misleading and misrepresentative, dontcha think?
His DOJ put them in prison, again, what has the DOJ done since then under any president?
If you are getting hung up on this minor detail, you really are one stupid fuck, because it doesn't really register in terms of what you should be concerned about.
Who can forget the Laffer Curve - its a classic, right up there with Alice in Wonderland.
http://www.theonion.com/article/reaganomics-finally-trickles-down-to-are...
Regan's DOJ actually upheld 200+ years of contract law and put fucking bankers/financiers in prison!!!
Someone remind me, how many of Tim Geithner's "arsonists" have gone to prison?
Ron did what he was told. By the bankers for the bankers, the lot of the Presidents.
Remember when that banker told Reagan - on a live mic non the less - to, "Speed it up!"
Fuck Reagan.
They will raise rates in legitimate fashion from Iron Mountain.
Why in the world do so many people, including David Stockman, who should know better, insist on labeling any economic policy they find wanting as "Keynesian". Read the Wiki entry about Keynes. There is nothing in there about Keynes advocating interest rate manipulation by central banks. Is mentioning the name "Keynes" simply supposed to serve as a substitue for logic and facts when presenting an argument, or maybe an easy bid for the support of other fuzzy-thinking people? This article could have been written without mentioning Keynes. It would have been more complelling if it had not done so.
Even when people correctly blame Keynes for the way governments use his theories to defend perpetual annual deficit spending, in good times and in bad, it is an unearned slap in long-dead Lord Maynard's face, and a base canard. The best criticism of Keynes points out that he was certainly naive to think that governments and the electorate would ever support cutting spending or raising taxes in boom times, but that criticism does not attack Keynesian theories on the usefullness of fiscal policy to flatten out the high and lows of the business cycle.
On an unrelated note, this prescient quote comes from the Wiki site for Keynes:
"While Micha? Kalecki was generally enthusiastic about the Keynesian revolution, he predicted that it would not endure, in his article "Political Aspects of Full Employment". In the article Kalecki predicted that the full employment delivered by Keynesian policy would eventually lead to a more assertive working class and weakening of the social position of business leaders, causing the elite to use their political power to force the displacement of the Keynesian policy even though profits would be higher than under a laissez faire system: The erosion of social prestige and political power would be unacceptable to the elites despite higher profits.[33]"
You can't have blue-collar workers fucking your daughters. Its Keynes fault if they do. Why not, for apparently everything, to some people, in the long run, is Keynes' fault. Please note that Mr. Kalecki notes that the elites would attack and displace Keynesian thought in order to reassert their social dominance. The Fed's monetary policies are the attack against Keynesism predicted by Kalecki.
Maybe it has less to do with Keynes than the fact that the fuckers doing this are calling themselves Keynesians. So many get caught up in terminology that has been deliberately manipulated for this effect and then trumpet their so apparent intelligence in pointing out the misuse of a term. I don't care if they call themselves Satanists or representatives of God. If they are fucking us, the best name to give them is the one they give themselves.
And If Keynes is your hero that you feel so compelled to defend, I'm sorry for you. You should do better.
I think Reagan may have meant well. But I'm not sure. I remember the first press release they put out the first day of his administration was that they were more flexible than they might have said during the campaign. It foretold that he would not live up to his billing, which proved accurate.
Reagan brought outsiders with him when his administration began. But after Reagan had been in office only a few months (March 30, 1981) he was shot by John Hinckley, the son of a Texas oil company CEO. (Who else do we know who was the CEO of a Texas oil company? Hint: his initials were GHWB. What a coincidence). Stockman was one of the outsiders - a breath of fresh air - then, as I recall, Stockman said that Reaganomics was a trojan horse, he was taken to the "woodshed" and then disappeared. Soon too were the other outsiders, replaced by the Nixon bunch.
Among other things too numerous to list, Reagan single handedly destroyed (or at least seriously damaged) the libertarian movement that had become so powerful - believe it or not - that the 1980 Republican platform was IDENTICAL to the platform of the Libertarian Party! I know because I was a volunteer for Ed Clark, the Libertarian candidate. BTW, it was the Reagan Administration that introduced NAFTA.
hey retards... in 82 offshoring was the deal and computers were upcoming layoffs were epic... there is alot of pain coming no matter what. sure you can blame the fed and the banks but it is just as likely that the best they can do is delay now and bullshit onward. it aint right it aint the truth but can we handle the truth
Reagan was the last US President who actually loved this country and wanted the United States to win.
Taking office at a time when the Soviet Union was fueling NLF-fronted revolutions everywhere and building the largest Navy and nuclear force on the planet, plus while laboring under a near-catastrophic economic crisis, I'd have to say that he did a pretty damn good job of tackling the biggest and most existential threats and then left the remainder for his successors to clean up-- which they didn't.
Sure, the Empire of Evil was buried under a mountain of debt piled up by Reagan-- and that's far cheaper than a mountain of blood.
Also, the next time you buy ammunition online or go into the gun store, be sure and say a little prayer of thanks to Ronald Reagan and Bob Dole. Prior to their time in office, it was necessary to SHOW IDENTIFICATION for every single bullet you bought and had it all faithfully recorded in the gun dealer's registry. Mail order ammo? Not unless you wanted it delivered by an ATF officer in a postal uniform.
You didn't know that, did you?
Nobody wants to remember anything good that any American has ever done.
It's all about tearing down America and making people ashamed to think of themselves as Americans.
It's worked for you all, I can see.
Most of this was accomplished over the dead bodies of a Democratic House and a shifting Senate. Against the frantic and virulent objections of the MSM-- which was the only information source available to Americans.
Did this require the typical sort of deal-making that has been going on since John Hancock was running things? Of course it was.
But Reagan had his priorities straight. King Dollar. Rebuild the US economy. Return innovation back to American shores. Bury the Soviet Union.
That's a damn good list of accomplishments, no matter what it cost on other fronts to make it happen.
Think of it.
World War Three.
And the other side just... forfeited.
After forty years of relentless military buildup and worldwide proxy wars.
They
Just
Gave
Up.
Thank you, Ronald Wilson Reagan. A true American hero.
Now back to our regularly scheduled programming.
The greatest single thing Reagan did to permanently damage the US Economy; outside of the Savings and Loan Crisis, was the Bi-Lateral Trade Agreement with Israel. It was theft of our economy by a foreign nation setting the stage for follow-on similar thefts leaving us where we are today.
The exact same criminal elements were advantaged each and every time.
A few thoughts about the S&L crisis.
1) Savings and Loan associations were specialized banks that could invest in nothing except real estate. Ergo, their entire portfolio consisted of land and buildings.
2) At the time, it was part of the tax code to permit investors to write off the interest paid on real estate loans regardless of how many properties you owned.
3) Congress abruptly changed the law and eliminated this deduction except in cases of your own personal residence. This changed millions of rental properties from cash-positive investments to cash-negative investments literally overnight.
4) The result was a default and foreclosure boom not unlike the 2008 crash.
5) Since these many properties were no longer cash-positive investments due to tax code changes, there were no buyers interested in taking them off the hands of the S&L industry-- who could not move over into other loan categories due to their restrictive charters.
6) Bang. Complete meltdown of an entire financial industry as a result of a single unintended consequence of a change in the tax code. No more S&Ls anywhere. All gone as a result of one single change in the tax code.
Take warning from this ancient episode. The government can eliminate your job, your industry, your way of life simply by accident. Count on nothing staying the same as it is today.
Not to nitpick, but the Savings and Loan Crisis was much more about greed than tax codes.
In a nutshell, it was the ability to buy a bank for 3 million in phantom cash, “loan” yourself 50 million to build a building and collect a commission guaranteed by the government for the “loan” generation. What is six percent of 50 million? Yup 3 million!!!
So, you get the bank (aka piggy bank) and the building for nothing and you get to collect the rent from the building.
All this and not penny out of pocket.
Yes, just like QE! Some people/corporations can get all the money they want for free (ZERO interest)!!
No fucking difference.
Reagan is also rolling over in his grave seeing the neocons hijack of both political parties!!!
Where does Keynes advocate for endogenous money?
Reagan deficit spent by the bucket loads. This deficit spending can be seen as exogenous money, meaning it came from outside of the banking system. Treasury bills ultimately are monetized from the FED, and this new "credit" was spent on MIC, and then the dollars found their way into the money supply. Once in money supply, they were used as transaction medium, or savings.
Even though the FED monetizes deficit spend, the TBills can stay on FEDs balance sheet forever. Has Reagans deficit spend TBills been used to reclaim their former credit? The answer is no.
Central banks can serve private banks, or they can serve goverment. The original concept of central banks was to monetize government credit, to then make exogenous money, to then cover the shortfall that is inherent to private debt spreading banking. The Usury is not comprehended in private banking. Without exogenous money, somebody is going bankrupt and others will be harvested in depression. It is baked into the cake as part of system design. Keynes merely came up with a stopgap. He didn't invent the system, it was the Goldmen that invented it as fraud.
What is in a name? Central Banks today serve their customers, other banks. These central bankers are emitting QE money, which is endogenous money....it comes from within the banking system, and is aimed at swapping with other debt instruments. It is not directed spend like deficit spending would be.
Is all this slamming of Keynes on purpose, or do these writers really not understand how a modern money system works?
Keynes, Fiat, etc, have become trigger words.
Nobody can accuse me of loving private bank credit; I'm a severe critic. But, all this renorming the word Fiat and Keyenes seem obscurant. Obsuring the truth is not cool.
Fiat money, if it is lawful (unlike today's fiat) would be a great boon to mankind.
Also, All systems predicate their output. Take a hard look at today's system - it is different than when Keynes was alive.
QE is a bad idea, and shouldn't be conflated with Keynes. Keynes would have been against QE - he was plenty smart enough to have seen right through the charade.
Reagan also worked on the supply side. Lots of people would just go golfing rather than working, because working more just meant more taxes. It got to where it wouldn't be worth it to work, and hence supply would not come on line.
Supply siders brought supply into alignment with demand. Supply increased, and demand (money as demand) increased simultaneously.
Yellen and the Fed are the ones that are idiots, not Reagan and his crew.
Reagan can be faulted for not going after rents; by cutting out some of the regulations that prevented rent seeking. Go after him for that, if one is going to be fair about things.
hahaha, Causality stands on its head with this poster.
Reagan created the mindset of WS assets fed on steroids. It was called supply side "no holds barred" deregulation, cut and pasted in City by Maggie to bloat the petrodollar debt spigot.
His successors pushed that model over the hill in "towering like a colossus NWO and outsourced hubris".
Now the chickens are coming home to roost, and since Lehman collapse those Oligarchs made rich by Reaganomics now tell their private sector TBTF banksta minions at the FED to OPEN the Monetary tap of Friedman's "our money your problem" print and never stop machine.
So when things get tuff; you start running faster and faster down that rotten road leading nowhere.
And all that this poster can remember of this 45 year time line is his Alzheimered rendering of Ben's Helicopter plays after Lehman shat its pants and soiled the federal deficit beyond recogniton; forgetting what started this whole rotten ball game; aka debt is asset fun and games!
Wow, some people should be on the Seinfeld show for geriatric fiat soup nazis gone brain dead!
Reagan isn't spinning in his grave, pal.
HE'S SPINNING IN HELL
Ronald Reagan rolling in his grave? WHat bull shit. Reagan was the promoter of both leverage buy-outs that caused tens of thousands of lost jobs and off-shoring American jobs and technical know-how got it's start in the Reagan years. And you think Keynes is the problem?
So many kudos to Ronald Reagan by all the people who have forgotten what he really did to this country.
QE is not helicopter money.
QE is endogenous keyboard money, swapped for debt instruments. These debt instruments are TBills, MBS, or Bonds. They are all swappable debts.
Therefore...the keyboard money chases after financial oligarchy. QE changes the price of debt instruments. Some call these debts "assetts" because they demand usury from money supply. But, these so called assets can be non performing, and to then chase after them with new keyboard money is false pricing signals. The so called asset appears to have price support. Appearance being the operateive word, since it is junk economics.
Helicopter money can be debt free, then go into productive channels, to then paydown private debts. Once it enters the banker ledger it can disappear, so it is not inflationary.
When one is in a balance sheet recession, then the objective is to wipe out PRIVATE DEBTS. WW2 was direct spending of exogenous money.
Why is it ok to helicopter spend in wartime, but not in peacetime.
I repeat, NO HELICOPTER spending has been done. NO EXOGENOUS MONEY has entered the money supply.
Banker's and finance definately DO NOT WANT to have their debts canceled either by haircutting nor by buying them down with exogenous money.
Private Debt Spreading objective is to put the world in debt. That is their business model.
So, all this noise about FIAT obscures the picture, and leads the sheeple into circles. The owners of the Casino are happy with their financial position.
The offshoring of U.S. jobs started in earnest in 1991, after the fall of Berlin Wall.
Pundits within the U.S. intelligentsia promoted the idea of the "end of history."
America was to be an innovation center, and the rest of the world was to be the workshop.
America would provide money to the world to be this workshop.
This kind of retrograde thinking obscures the idea that not everybody can be an innovater. Nor, does it understand that money is law, and hence money belongs only to a nation's people, not the international.
Wall-Street pushed these bad ideas to take wage arbitrage. Wage Arbitrage ends up off shoring jobs, but some of the profits end up in wall street.
1991 is post Reagan.
Reagan did de-regulate some inelastic markets which was a mistake. Fault him for not understanding Governments true role. Government belongs in inelastic markets, where Government is the lowest cost producer. It cannot be argued against, Government is the lowest cost producer in its segment.
In other market types, government's presence should be minimal, as it then becomes an economic drag.
Parasites want to redefine reality. Privatizing the commons to take pereptual rents, is a way to take already paid for lands, or other producing assests, and then convert them for private gain.
In the same way, government bureaucrats can abuse their privledge to take rents.
C'mon David. You of all people should know that the "Gipper" was totaly unqualified to be president of the US. He only served to read lines given to him by the people who were systematically destroying the last remnants of constitutional democracy, in favor of the corporate and Wall Street oligarchs.