affirmative action, 82–85, 201–2, 300nn35, 40
African Americans, income inequality of, 200–202
aggregate demand
defense spending as prop to, 66, 173, 180, 324n14
fiscal policy and, 42
four-part division of, 22
inflation as caused by excessive, 33
inflation as causing reduction in, 31
insufficient as cause of recessions, 22, 33, 174
management of, 33–34, 63, 66, 271
alternate approaches, 44–48
criticism of, by Council of Economic Advisers under Reagan, 41–42
Aid to Families with Dependent Children (AFDC), 86–88, 90, 96, 97, 115–19, 223–24, 276n7, 309n46
coverage of, 1984–90, 310
state waivers from, 248, 341n14
termination of, 247–49, 258, 344n54
American Enterprise Institute, 107, 272
Americans with Disabilities Act (ADA), 214–19, 244
Armey, Richard, 300n22
Aschauer, David, 267
assembly line, 18
AT&T, 85
Bakija, Jon, 94
balanced budget. See budget, balanced
Balanced Budget and Emergency Deficit Control Act. See Gramm-Rudman-Hollings Act
balanced-budget multiplier, 47, 293n43
banks
deposit insurance of, 190–91
Federal Funds rate for, 73–75, 294n6
foreign, U.S. economy and, 138–39
reserve requirements for, 75
See also Federal Reserve System
Baran, Paul, 296n17
Bartley, Robert, 111, 125, 127, 128, 139, 150, 151, 155, 195–98, 208, 209, 306n12, 319n32
Baumol, William, 295n10
Bentsen, Lloyd, 169
Berle, Adolph A., 346n3
blacks, income inequality of, compared to whites, 200–202
Blair, Margaret, 346n3
Blecker, Robert, 134, 318nn23, 26
Blinder, Alan, 60–61, 123, 317n20
Bound, John, 201
Bowles, Samuel, 141, 142, 146–48, 166
bracket creep, 46–47, 80–81, 101
Bradley, Bill, 221
Brainard, William, 295n10
Britain as creditor nation, 138
Brookings Institution, 52, 53, 117, 134, 295n14
BTU tax, 233–35
Buchanan, James, 282n11, 284n24
Buchanan, Patrick, 251
automatic cuts in, 122–24
balanced
claims for necessity of, 19–21
Clinton-Republican agreement, ix, 1, 121, 240, 249–53
crowding-out hypothesis, 259
deadline set for, 9, 250, 259, 261, 263
“Financial Fundamentalism,” 265, 345n1
and income redistribution, 2–3
as Perot’s first priority, 225
proposed Constitutional amendment, 5, 19, 122, 238, 240
Reagan’s promise of, 34–35
baseline, 275n4
high-employment, 100–101
Burford, Anne, 81–82
Burtless, Gary, 117
Bush, George, 23, 81, 104, 255, 323n6
accused of not fighting deficit, 175
civil rights under, 219–20
entitlement spending and, 209–10
health insurance reform by, 121
NAFTA and, 207–8
regulatory policy of, 114–15, 207, 212–14
Americans with Disabilities Act, 214–19
tax policy of, 112, 169, 207–12, 222, 225, 257
business, big. See corporations
business cycle, 21–24
control of, 34
deficits and, 144–45, 174–75, 240
investment and, 126–27
long-term comparisons, 153
profit rates in, 286n3
business debt
compared to government debt, 171–72
1960–89, 321
Canada
health care in, 246–47, 340nn8, 9
in NAFTA, 207
capability increase, 16
capacity utilization rate, 14
1960–90, 158–59
of 1960s compared to 1970s, 25–26, 286n2
lower than average in recent years, 143, 148
in recessions, 285
capital
as factor of production, 14
inflation and income from, 31–33
in Marxist analysis, 59
military protection of free flow of, 65
speculative flows of, 271, 348n18
venture (start-up), 127–28, 155
capital consumption allowance, 312n12
capital gains
definition of, 32
by high-income families, 1980–90, 331
rise in incomes from, 193, 194
taxation of, 34, 111–12, 155, 207, 308n37
capitalism
economy held hostage by, 103
monopoly, 287n7
See also corporations
capital-labor accord, 166
carbon tax, 233–34
Carter, Jimmy, 34, 85, 102, 255
inflation policy of, 52, 54–55
Catholic bishops, letter of, 265–67
CBO. See Congressional Budget Office
Center for Popular Economics, 272, 296n18, 348n21
Center for the Study of American Business, xv, 41, 85, 220, 339n1
Central Bank, U.S. See Federal Reserve System
Chomsky, Noam, xvi
civil rights
under Bush, 219–20
Americans with Disabilities Act, 214–19
under Reagan, 82–85
Civil War, 172, 270, 321n5, 347n14
Clinton, Bill
balanced budget agreement of, ix, 1, 121, 240, 249–53
early effort against Reagan Revolution by, 23, 227–40
education program of, 232
health-care reform attempted by, 5, 121, 245–47, 246n6
NAFTA supported by, 226–27
1992 election of, 225–27
regulatory policy of, 115, 246
on role of government, 18–19
tax policy of, 23, 112, 226, 228–29, 231, 233
Volcker-Reagan program completed by, 253–58, 264
welfare policy of, 247–49 (see also welfare reform law)
Clinton, Hillary Rodham, 245, 246
Commerce, Department of
Bureau of Economic Analysis investment classification, 180–81, 253, 326n21
current and investment categories, 21
switch from GNP to GDP by, 303n54, 305n2
Commoner, Barry, 280n6
Community Services block grants, 89, 90
community work experience programs (CWEP), 115
Congress, historical overspending by, 19
See also Republicans in Congress
Congressional Budget Office (CBO), 104, 178, 250, 337n53, 343n44
baseline budget of, 275n4
Conrail, 38
conservative economics, 34, 56, 263, 266
mainstream critique of, 51–52, 55, 56
on 1981–82 recession, 102, 103
political takeover by, 271–72
radical economics and, 56–57, 69
role of government in, 35–50
See also supply-side economics
consumer price index
in misery index, 286n5
of 1960s compared to 1970s, 29
tax brackets indexed to, 81
consumer spending, 1980s growth of, 136
consumption
GDP and, 161–62
increased by investment, 126
private, 22
subsidized, 94
contracts, government as enforcer of, 37
Contract with America, 3, 5, 19, 20, 61, 97, 115, 277n14, 278nn16, 17, 19, 289n24
lack of health-care policy in, 121
limited view of government in, 241
contributory entitlements, 49–50, 91–96
cooperatives, 279n3
corporations
control of, 346n3
taxation on, 111
Corrigan, Gerald, 211
cost of job loss, 142, 147–48, 166
Council of Economic Advisers, xv, 13
under Bush, 125, 128–29, 132, 188, 190, 191, 212, 214, 334n2
under Carter, 52
under Clinton, x, 236–41, 244, 250–53, 262, 343n44, 345n63
under Kennedy, 33
under Reagan, 35, 37, 39, 41, 46, 48, 78, 79, 92, 125, 169, 346n3
Council on Competitiveness, 114, 207
counterfactual, definition of, 163
credit, increased reliance on, 144
crowding-out hypothesis, 19, 43–44, 131–33, 140, 141, 162–65, 259, 319nn31, 32
Cuban missile crisis, 176
Cuomo, Mario, 221
Cypher, James, 325n18
household, business, and private, 321
private, compared to government, 170–72
See also deficits; national debt
aggregate-demand effect of, 66, 173, 180, 324n14
and allocation of funds, 177–80
call for, in Contract with America, 278n17, 284n20
after fall of Soviet Union, 231
as indirect subsidy to business, 284n20
Internet as a result of, 37
as necessary evil, 36
1986–93, 337
1987 as beginning of decline in, 223
as percentage of GDP, 173, 323n7
Reagan’s increase in, 35, 38, 97–98, 104–5
technological progress and, 178–79, 325n18
after World War II, 66, 296n17
deficits
antirecession policies and, 54, 295n10
business cycle and, 144–45, 174–75, 240
under Carter, 54
Clinton’s policy on, 229–31, 235–36
decline of, in 1990s, 5, 278n18
effects on economy, 19, 165, 170–76, 272, 282n11, 291n34
federal plus local, 305n4
under Ford, 54
future effect of decline of, 259–61
government borrowing and, 44, 174
Gramm-Rudman attack on, 122–24, 132–33, 208, 209
under Reagan, 8, 100–101, 104, 130, 146, 162–65, 169, 315n54
structural, definition of, 324n9
twin, 129–48
See also national debt
demand curve, 299n21
Denison, Edward, 295n10
deposit insurance, 190–91
Depository Institutions Deregulation and Monetary Control Act, 75, 188
depreciation
effect of inflation on, 31, 48
depressions, 21
deregulationSee regulatory relief
dividend income
interest income and, 197
rise in, 192–94
dollar
domestic effect of low exchange rate for, 134–35, 313n20
foreign holdings of, 131, 137, 144–46
international-reserve status of, 70–73
rise in value of, during 1980s, 145
slide in value of, during 1970s, 70–71
after World War II, 65
Dulles, John Foster, 324n14
Duncan, Greg, 199–200, 330n78, 332n79
earned-income tax credit (EITC), 228, 233, 252
economic growth
capability increase in, 16
determination of, 14–19
effects of, on middle class and poor, 3–4
factors of production and, 16
income distribution and, 62–63
since Industrial Revolution, 17, 281n6
investment as main cause of, 22
of 1960s compared to 1970s, 25–27, 286n1
productivity increase in, 16, 18
economic history, need for study of, 6–9
Economic Justice for All, 265–67
Economic Policy Institute, xv, 200, 272, 318n26, 348n21
Economic Recovery Tax Act of 1981 (ERTA), 79–81, 99–101, 105–6, 108, 109, 127, 174
Economic Report of the President. See Council of Economic Advisers
economic rights, 265–67
economics, derivation of term, 11
economic well-being, GDP as measurement of, 12–13
economy
internationalization of, 139
long-run comparisons of, 153–59
structural defects in, 57–58
as structure of interrelationships, 165
See also international economy
education, 182–84
Clinton’s program on, 232, 251, 252
compensatory, 90
elementary and secondary, spending for, 328
spending on buildings for, 181–82
world job creation by, 140, 229, 251
Eisenhower, Dwight D., 295n10, 334n1
Eisner, Robert, 20–21, 144, 235, 267
elections
1980, 34–35, 55, 227, 322n6, 333n1
1988, 333n1
1992, ix, 195, 221, 225–27, 338n63
recessions and outcome of, 333n1
Employee Benefit Research Institute, xv
Employment Act of 1946, 54, 276n6
enclave economies, 137
Engler, John, 248
entitlements
Bush’s policy on, 209–10
definition of, 49
means-tested, 49–50, 86–91, 118
Perot’s opposition to, 226
Reagan and, 86–96, 107, 115–20
entrepreneurship, 14, 35–36, 127–28
environmental impact statement, 40–41
environmental regulation, 61, 81–82, 212–14, 271
See also pollution
Equal Employment Opportunities Commission (EEOC), 82–84, 217, 219
externalities, conservative attitude to, 39–41, 290n27
Family Support Act of 1988, 115, 117, 223, 224, 248
farmers, food stamps as support for, 118
Fayol, Henri, 280n5
Federal Communications Commission, 85, 302n42
Federal Funds rate, 73–75, 104, 130, 221–22, 229, 238, 255, 257, 260–61, 294n6
gap between long-term rates and, 230
Federal Reserve System (U.S. Central Bank)
Clinton administration and, 229–30, 237, 238, 255–57
Clinton’s surrender to, 257
democratic control needed, 269, 272, 347n13
description of, 277n9
inflation and/or unemployment battled by, 2
monetary policy of, 42, 44, 70, 72–73, 101, 130, 131, 133, 288n15
part of national debt held by, 320n3
preemptive strikes against inflation by, 105, 238, 257, 317n20
recession of 1990 and, 210–11, 221–22
Federal School Lunch Program, 97
Feldstein, Martin, 92
Financial Markets Center, 270, 272, 347n13, 349n21
fiscal policy
definition of, 288n15
impossibility of calculating right time for, 41–42
fiscal years, change in, 277n10
Follet, Mary Parker, 280n5
food stamp program, 87, 88, 90, 96, 97, 118, 223, 249, 303
tax policy of, 53, 54, 174, 255
foreign borrowing by U.S., 135, 239
foreign investment in U.S., 131–32, 135–41, 164, 313nn20, 29, 319n32, 320
foreign trade
Clinton and expansion of, 241
U.S. deficit in, 72, 132, 134–35, 144, 261, 313n25
See also international economy
Freeman, Richard, 201
Friedman, Benjamin, 133, 136, 138, 141, 143, 146, 176, 180, 312n16, 320n35
Friedman, Milton, 19–20, 43, 149, 294n1
full employment
as cause of inflation, 268–69
compatiblity with capitalism, 205
as inflationary, 267
international capital flows and, 270–71
See also unemployment, structural
Full Employment and Balanced Growth Act (1978), 44, 46, 55, 272, 276n6
Galbraith, John Kenneth, 287n7, 346n3
Garn–St. Germaine Act, 85, 188
Gebhardt, Richard, 221
General Agreement on Tariffs and Trade (GATT), 208, 241, 271
General Motors Lordstown, Ohio, plant, 67, 147
Gingrich, Newt, 209, 265, 278n16
gold, the dollar and, 70–72
Gordon, David, 141, 142, 146–48, 166
Gorsuch, Anne, 81–82
government
Clinton-Republican conflict on role of, 18–19
conservative indictment of, 35–36
ineffectiveness of, 291n39
investment by, 18, 20–21, 267–68
Bureau of Economic Analysis classification, 180–81, 326n21
1993–97 nondefense, 254
proper role for, 36–39
purchases by, 22
Republican shutdowns of, 1, 5, 275n1
as source of power in economy, 61
spending by
denunciations of, 35, 259, 289n19
effects of balanced budget on, 19–20, 282n12
multiplier, 42–43
as wasteful, 176–80
subsidies and other support by, 36–37, 61–62, 281n7, 295n16
wealth as major influence in, 61–62
Gramm-Rudman-Hollings Act, 122–24, 132–33, 208, 209
Great Depression, 33, 191, 296n17
Greenspan, Alan, 93, 229–30, 232, 237, 253, 262
gross domestic product (GDP)
Commerce Department switch from GNP to, 303n54, 305n2
deficit as percentage of, 104, 130, 175
description of, 12–14
growth of (see economic growth)
investment as percentage of, 126–27
money supply and, 290–91n30
per capita, 13
1960–90, 159–60
of 1960s compared to 1970s, 26–27
ratio of consumption to, 161–62
ratio of debt to, 170, 174, 322
real, definition of, 13
statistical comparisons to, 284n28
total government spending as percentage of, 276n8
gross national product (GNP), 303n54, 305n2
Guatemala, U.S. coup in, 296n20
Hawthorne studies, 280n5
health care
balanced budget and, 4
Clinton’s attempted reform of, 5, 121, 245–47, 246n6
Congressional attitude on, 310n67
lack of policy on, under Reagan, 121, 188
productivity growth from, 267
rising costs of, 185–88
Health Care Financing Administration, 224
health insurance
in Clinton’s reform proposal, 245
employer and employee spending on, 329
percentage of Americans not covered by, 187, 327n37
Heritage Foundation, 272
Hess, Peter, 280n5
history as laboratory of social sciences, 6
household debt, 321
hysteresis, 313n20
imperialism, modern version of, 137–40
incentives
author’s conclusions on, 152–53
conservative economists on, 63, 161–62
for higher income, 60–61
mainstream economists’ views on, 51–52
incentive tax credit, 51
income
from capital, inflation and, 31–33, 48
change in family, 1960s vs. 1970s, 26–28
definition of, 60
disposable personal, 161
distribution of
economic growth and, 62–63, 279n2
fairness in, 60–61
GDP and, 13
in Marxist analysis, 59
Reagan Revolution policies, 3–4
rising inequality argued, 3, 192–202, 205–6
as wages vs. profits, 62–63
interest vs. dividend, 197
redistribution of
and attacks on government spending, 283–84n20
current constraint on, 2–3, 6, 257
efficiency cost, 48
as legitimate government role, 48
Reagan’s policy, 86–96, 107, 115–20
satisfaction in society raised, 61
income stream, capitalized value of, 290n28
Industrial Revolution, 59
inequality
See also income, distribution of
inflation
business uncertainty created by, 30–31, 48
creditors and debtors affected by, 29–31
expected rate of, 298n19
Fed’s authority to fight, 2
Fed’s preemptive strikes against, 105, 238, 257, 317n20
government policies against, 268–69
income from capital affected by, 31–33, 48
from printing of money, 282n16
Reagan Revolution and, 8
traditional tools against, 33
unemployment and (see unemployment, inflation and)
Volcker’s attack on, 7, 72–75, 78–79, 98–99, 101–2, 104
inflation premium, 30
infrastructure investment, 180–82, 232, 252
integrated circuit, 296n16
interest income compared to dividend income, 197
interest rates
financial deregulation and, 192
freed from Regulation Q, 75–78, 192
government borrowing and, 43
monetary policy and, 288n15
money creation for reduction of, 270, 347n14
real, 75, 104, 133–34, 143, 189, 209n19, 306n15
of savings and loan institutions, 189
See also Federal Funds rate; Federal Reserve System
international economy
creditors’ vs. debtors’ influence in, 138–39
dollar as currency of, 70–72
“ownership” in, as irrelevant, 137
U.S. and free trade in, 311n76
after World War II, 65
See also foreign trade
investment
definition of, 284n23
foreign, in U.S., 131–32, 135–41, 164, 313nn20, 29, 319n32, 320
by government, 18, 20–21, 171–72
gross vs. net, 129
infrastructure, 180–82, 232, 252
business cycle and, 22
governmental subsidies and other influences on, 36–37, 281n7
government crowding out of, 19, 43–44, 131–33, 140, 141, 162–65, 259, 319nn31, 32
government spending and, 42–43
incentives for, 51–52
inflation’s effect on, 30–31, 48
as main cause of economic growth, 22
purely financial, 127–28, 143–44, 156, 269
reasonable return, 23–24
tax straddles in, 308n26
savings and, 47
technological progress and, 126–27, 150
Iran, CIA action in, 296n20
Japan
investment from, 319n32
role of government in, 36–37
Jerome Levy Economics Institute, 272, 348n21
Job Corps, 90
job creation
defense spending and, 177–79
increased training for, 140, 229, 251
1960–90, 157–58
after 1990 recession, 223
Job Creation and Wage Enhancement Act, 115
job satisfaction index, 147, 314n46
JOBS program, 115–16
Johnson, Lyndon B., 271
Kennedy, Edward, 221
Kennedy, John F., 4, 33, 255, 295n10, 296n16
Kennedy-Kassebaum Act, 310n67
Keynes, John Maynard, 22, 33, 271, 282n11
monetarist opposition to, 42–43, 45, 47–48
Krugman, Paul, 195–96, 198, 200
labor
balance of power lost by, 141–42
as factor of production, 14
improvement in productivity of, 17–18, 57–58
length of work week of, 203–5
voluntary cooperation by, 15, 16, 57, 147, 166, 184, 280n5
after World War II, 63–64, 67–68
See also work; workers
labor market, unique characteristics of, 202–3
land as factor of production, 14
Lavelle, Rita, 82
leisure, decline in, 202–5, 333n90
Lindsey, Lawrence, 6, 111, 150–52, 196, 208
long-swing school, 63, 296nn17, 18, 297n21
Lordstown (Ohio) General Motors plant, 67, 147
mainstream economics, 51–52, 55, 56, 59, 63, 263
critique of 1983–90 by, 129–32
on 1981–82 recession, 102, 103
power as viewed in, 61
twin deficits criticized by, 132–41
Makin, John, 107
management theory, 15–16, 280n5
marginal costs, 39–40
marginal propensity to consume (MPC), 42
market economy, government’s role in, 37–39, 61–62
markets
contestable, 38
imperfectly competitive, 287n7
labor, Marxist critique of, 59
regulatory reform and, 212–14
Marx, Karl, 56
Marxism, owner-worker antagonism in, 15–16, 58–60
Mayo, Elton, 280n5
Means, Gardner C., 287n7, 346n3
means-tested entitlements, 49–50, 86–91, 118
Medicaid
changes in outlay for (1984), 90
conservative objections to, 95
nursing care for well-off paid by, 119–20, 186, 309n63
percentage of poor covered by, 119
proposed cuts in (1995), 275n4
Medicare
conservative objections to, 94–95
as contributory entitlement, 49
controls placed on (1997), 3, 277n12
cost of part A vs. part B, 309n65
proposed cuts in (1995), 275n4
Reagan’s policy toward, 95–96, 186
rise in spending by, during 1980s, 120–21
tax for, extended to all income, 338n67
middle class, income of, 195–200, 333
minorities, impact of 1970s slowdown on, 67
Minsky, Hyman, 144
misery index, 28–31, 33, 244, 340n2
Mondale, Walter, 169
monetarism
Fed’s conversion to, 70, 72–75, 298n13
Keynesians and, 42–43
monetary policy, 41–42
definition of, 288n15
1984–98, 104–8
money
creation of, to reduce interest rates, 270, 347n14
three roles of, 71
wholesale printing of, 282n16
mortgages
of savings and loan institutions, 188–89, 327n41
multiplier
example of, 293n43
monetarist denial of, 42–43, 47–48
Munnell, Alicia, 267
NAIRU (nonaccelerating inflation rate of unemployment), 45–46, 317n16
National Bureau of Economic Research, 221, 284n21, 316n8
National Commission on Excellence in Education, 182–84
alleged burden of, 170–76
interest payments on, 170, 174, 322
monetizing of, 282n16
See also deficit
national-defense spending. See defense spending
National Labor Relations Act, 61, 63–64
National Reinvestment Fund, 270, 347n13
National Security Council, 324n14
Nation at Risk, A, 182–84
natural law, 266
new classical economics, 291n39
Niskanen, William, 112
Nixon, Richard M., 88, 271, 295n10, 333n1
North, Douglass C., 289n22
North American Free Trade Agreement (NAFTA), 207–8, 226–27, 229, 241, 271
nursing homes, Medicaid financing of care in, 119–20, 186, 309n63
oil
falling prices for, in 1980s, 130
low price of, after World War II, 65–66
rising prices in (1973–74, 1979), 52, 53, 145
oligopoly, 287n7
Omnibus Budget Reconciliation Act (OBRA)
of 1987, 113
of 1990, 209
opportunity costs, 134
Ornstein, Norman, 107
owners
conflict between workers and, 15–16, 58–60
corporate decision making by, 346n3
Panel Study of Income Dynamics, 199–200
Pendleton, Clarence, 84
pensions, inflation and, 30
Perelman, Michael, 144
Perot, H. Ross, 136, 138, 141, 170, 175, 180, 225–27, 243, 281n9, 337n59
Perry, George, 295n10
Personal Responsibility Act, 248, 249
Phillips Curve, 44–45, 52, 292, 305n6
planning system of economy, 287n7
police, 3
conservative support of power of, 37
as necessary for free market, 38
politics, money-driven, 260, 272, 346n4, 347nn10, 11
pollution
Bush administration and, 212
market incentives to reduce, 214
problem of regulation of, 41
See also environmental regulation
poverty
Catholic bishops on, 265–66
children in, 345n63
low-wage jobs and, 117–18
recent increase in, 142
safety net in reduction of, 68
wages at and below level of, 194
power
capitalists’, safety net and, 68
of creditors, 138
definition of, 61
radical economists’ view of, 61–62
reassertion of, by business, 141–42, 146–48
PPOs (preferred provider organizations), 186–87
prices
when equal to marginal costs, 39–40
as society’s signaling device, 40
price takers vs. price makers, 287n7
prime rate, definition of, 298n18
private property, government as protector of, 37
private sector borrowing (1960–89), 319n34, 321
production
internationalization of, 139
means of, 58
compound rate of growth compared to, 316n9
defense spending and, 179–80, 326n18
investment and, 126–27, 259–61
job growth and (1960–91), 318
marginal tax rates and, 244
1960–90, 155–58
1960s vs. 1970s, 25–26, 56, 68, 286n2
slowdown in, 68, 166–68, 295n10
profit
in Marxist theory, 59–60
shares of (1983–96), 250
rate of
calculation of, 286n3
definition of, 59
of 1960s compared to 1970s, 26
of 1970s compared to 1980s, 315n1
recessions needed to reestablish, 102
Program for Economic Recovery, 35
prosperity after World War II, 28, 63–68, 296n17
protectionism, 140, 208, 311n76
public choice school, 268, 282n11, 284n24
public service employment, 89–91
Quayle, Dan, 207
radical economics, 15, 56–57, 263
conservative economics and, 69
on 1981–82 recession, 102–3
power as viewed in, 61–62
on twin-deficits problem, 141–48
rational expectations school, 291n39
raw materials, cheap, 65–66
Reagan, Ronald, 272
entitlement policy of, 86–96, 107, 234–35, 248
judicial appointees of, 84
reasons for popularity of, 55–56
regulatory relief under, 81–86
shrinking of government by, 96–98
summary of policies of, 98–99
tax policy of, 4, 6, 35, 79–81, 101, 105–12, 169, 308n36
Volcker’s program and, 7–10, 35, 56, 78–79, 98–99, 101–2, 124, 130, 142, 205, 231, 255, 306n7
completed by Clinton, 253–58, 264
whether success or failure, 149–68, 263–64
Reaganomics, xiii, 34–35, 346n4
Reagan Revolution, x, 117, 146, 273
fruits of, 2–4
reaffirmation of, in 1995, 25
role of government in, 4
stages of, 4–6
structural changes not produced by, 148
success of, xi, 2, 5–6, 257–58
real spendable hourly earnings, 147, 314n47
recessions
automatic stabilizers in, 100, 240, 262
change in policy responses to, 255–58
deficits in prevention of, 144, 174–75, 240
investment as only way out of, 151
NBER’s identification of, 284n21
1962–94, recoveries after, 243
1974–75, x, 2, 9, 27, 53–54, 151–52, 174, 255–56, 285, 271
1981–82, x, 8, 56, 68, 74, 78–79, 91–92, 100–103, 285, 306n12
1990, x, 7, 209–12, 221, 255–57, 262, 281n9, 284n22, 285, 335n15
peaks and troughs of, 285
periodicity of, 21–22
potential causes of, 262
recycling, 113–14
regulation
in Clinton’s health care plan, 246, 340n6
environmental, 61
expenditures for, 41, 113–14, 290n29, 302n43
externalities and, 41
regulatory relief
under Bush, 114–15, 207, 212–14
under Carter, 85
under Reagan, 23, 35, 81–86, 112–15
savings and loan institutions, 188, 190, 192
by reinventing government, 23, 25
Reich, Robert, 137, 139–40, 180, 229, 232, 251, 325n18
rent control, 76
rents
rise in incomes from, 192–94
Republicans in Congress
budget agreement of Clinton and, ix, 1, 121, 240, 249–53
health-care reform not proposed by, 310n67
proposed tax cuts (1995), 1, 275n4
Reagan Revolution supported by, 25
on role of government, 18–19
Resolution Trust Corporation, 189, 190
Restoring the Dream, 241, 281n10, 289nn18, 24, 310n67
Reynolds, Alan, 198–99
Reynolds, William Bradford, 83
Rodgers, Willard, 199–200, 330n78, 332n79
Roosevelt, Franklin D., 205
Roth, William, 79
Rudman, Warren, 123
Samuelson, Robert, 252
satisfaction level, 11–12
satisfaction of society, 290n27
savings
inflation’s effect on, 31–33
investment distinguished from, 161
whether investment independent of, 47
Social Security and, 92
supply-siders on tax effect on, 161–62
savings and loan institutions, 75, 77–78, 85, 145, 188–92, 205, 213
Schor, Juliet, 142, 202, 204–5, 333n90
Seger, Martha, 211
semiconductors, 296n16, 325n18
Siciliano, Julie, 280n5
Smeeding, Timothy, 199–200, 330n78, 332n79
Smith, Adam, The Wealth of Nations, 17, 38, 140
social costs and benefits, conservative attitude to, 39–41, 290n27
social mobility and income distribution, 198–99
1977–86, 331
Social Security
conservative opposition to, 49, 92–93
part of national debt held by, 320n3
plans for control of growth of, 3, 93, 106–8, 307n22
political legitimacy from, 64, 68
poverty of recipients of, 293n47
taxation of benefits from, 93, 107, 228–29, 234–35
Social Security Disability Insurance (DI), 91
U.S. spending race with, 176–77
stagflation, 33–34, 44, 50, 52, 141
stagnation, 63, 143–46, 175–76, 296nn17, 18, 297n21
Star Wars, 178
states
federal programs and, 96–97, 113, 115, 117
income redistribution given to, 264
Stein, Herbert, 282n12
Steuerle, C. Eugene, 81, 94, 109, 288n11, 307n22
Stockman, David, 106
stock market, 193
subsidies, governmental, 36–37, 61–62, 281n7, 295n16
Supplemental Security Income (SSI), 49, 89, 90, 223, 249, 258
Supplementary Medical Insurance (SMI), 94
supply curve, 299n21
supply-side economics, 46–48, 79–80, 111–12, 150, 162, 244, 288n16
carbon tax and, 233–34
regressive taxes favored by, 108
Sweezy, Paul, 296n17
takeovers, 128, 156, 316n10, 346n3
taxation
BTU, 233–34
Clinton’s health care plan and, 245–46
on corporations, 111
inflation and, 31–33, 48, 287n9, 288n11
marginal
Clinton’s policy, 228
definition of, 278–79n21
as incentive, 6, 35, 79–80, 152
productivity growth and, 244
supply-side arguments on, 46–48, 108
proposed Republican cuts in (1995), 1, 275n4
Reagan’s policy on, 4, 6, 35, 79–81, 101, 105–12, 169, 308n36
regressive, supply-siders and, 108
revenue neutral, 109
Tax Equity and Fiscal Responsibility Act (TEFRA), 106, 108
tax-exempt bonds, 287n9
tax straddles, 308n26
technological progress (new technology), 17–18
capitalism’s influence on, 60
defense spending and, 178–79, 325n18
government purchases and, 295n16
Temporary Assistance for Needy Families (TANF), 344n54
Terkel, Studs, 67
Thatcher, Margaret, x, 34, 266, 271
Third World
fear of default on loans by, 75
modern imperialism in, 137
Thompson, Tommy, 248
Thornburgh, Richard, 121
Tobin tax, 270
tort reform, 216
trickle-down economics, 5, 6, 141, 225, 338n61
“truly needy,” definition of, 89
twin-deficits problem, 129–48
uncertainty
Fed’s policy as leading to, 42, 44
underdeveloped countries. See Third World
unemployment
black to white, ratio of, 201
effect of minimum wage on, 76, 299n22
as result of fewer workers working longer, 204–5
Fed’s authority to fight, 2
incentives and reduction of, 51
“natural” rate of (NAIRU), 45–46, 317n16
1960–90, 158–59
in 1960s compared to 1970s, 25–26, 286n2
in recessions, 285
as result of inflation and anti-inflation policy, 130
in Clinton’s first term, 237–38
Ford’s and Carter’s policies, 53–55
Phillips Curve, 44–45, 52, 292, 305n6
Reagan’s promise to fight both, 55
structural
as 4 percent, 14, 44–45, 166, 267, 272, 276n6
as 5.5 percent, 317n20
as 6 percent, 101, 104–5, 130, 210, 305n3
traditional tools against, 33
unemployment compensation
antirecession function of, 64
Bush’s policy toward, 222–23
Clinton’s policy toward, 228
as counterproductive, 2, 48, 91, 122, 276n7
NAIRU determined by, 46
Reagan and, 91–92, 121–22, 142
United States Central Bank. See Federal Reserve System
Urban Institute, xv, 87, 89, 95, 198
Vidal, Gore, 324n14
Vietnam War, 66
Vision of Change for America, A, 227–28, 231, 235–36, 257, 263, 338n73
Volcker, Paul, 7–9, 34, 35, 56, 93
attack on inflation by, 72–75, 78–79
See also Reagan, Ronald, Volcker’s program and
VRB (Volcker-Reagan-Bush) decade, 153–54, 156–60, 162, 181, 186
wages
“citizen,” 68
in Clinton’s first term, 244–45
minimum, 76, 117, 299n22, 341n20
fall in share of (1983–97), 250
profits vs., 62–63
recent effort to reduce, 142
Wagner, Richard (economist), 282n11
Wanniski, Jude, 288n16
Warren, Melinda, 220
Watt, James, 81
wealth
income distinguished from, 60
as major influence in government, 61–62
concentration of (1989), 193
Weidenbaum, Murray, 41, 81, 83, 112, 113, 282n12, 289n19, 290n29
Weisskopf, Thomas, 141, 142, 146–48, 166
welfare
Clinton’s proposals on, 247–49
in Contract with America, 278n19
JOBS program and, 115–16
moving people to jobs from, 116–18
poverty produced by, 276n7
Wisconsin and Michigan reforms of, 248
workfare and, 88
welfare reform law, 1, 5, 224, 248–49, 252, 258
Wofford, Harris, 121
Wolff, Edward N., 193
women in labor force
increased participation of, 203
in 1970s slowdown, 67
Women, Infants, and Children (nutrition program), 90–91, 266
Woodward, Bob, 229, 233, 253, 338n63
work
intensity of, 58, 60, 67, 146–48, 166
involuntary part-time, 204
supposed unwillingness of, 224
voluntary element in, 15, 16, 57, 147, 166, 184, 280n5
See also labor
workers
amount of inequality among, 147
conflict of owners and, 15–16, 58–60
decline in income of (1979–89), 166
fringe benefits for, 204
increase of married women as, 202, 332n88
increase in work by (1979–89), 202, 332n88
index of satisfaction of, 147, 314n46
percentage of supervisors over, 147
real spendable hourly earnings of, 147, 314n47
risk premiums for, 214
See also labor
workfare, 88