40 years later, is this the end of Reaganomics?
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It’s been just over 40 years since newly elected President Ronald Reagan declared, “In this present crisis, government is not the solution to the problem, government is the problem.”
We’re about 39 years and four months away from the legislative manifestation of that idea, the Economic Recovery Tax Act, which codified “Reaganomics,” supply-side economics, trickle-down economics, whatever you want to call it.
All these decades later, we’re still talking a lot about this policy because Reagan was so good at promoting it. People could understand the metaphor of government spending as a household budget in need of a cutback, said Brown University political economist Mark Blyth.
“That rather ignores the fact that I don’t get to issue my own currency, there’s no such thing as a Kai Ryssdal bond market,” Blyth said. “But because all that stuff accords with common sense, it’s an easy sell.”
Now we’re in a new financial crisis, with plenty of data on the “trickle-up” consequences of trickle-down and a $1.9 trillion pandemic relief bill. Reagan had “Morning in America,” Joe Biden has “Infrastructure Week.” On today’s show, we’ll talk with Blyth about how Reaganomics was supposed to work, its ripple effects on Democrats and whether the era of “The era of big government is over” is … over.
Later in the show, we’ll track more big firms getting rid of their offices, wade into crypto just a bit and learn about code breaker Elizebeth Smith Friedman. Plus, a correction from a 2-year-old listener.
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Here are links to everything we talked about on the show today:
- “Bidenomics beats Reaganomics and I should know – I saw Clintonomics fail” from previous Marketplace contributor Robert Reich in the Guardian
- “2020 Was the Year Reaganism Died” by Paul Krugman in The New York Times
- “Biden is planning for a Great Society 2.0” by James Hohmann in The Washington Post
- “JPMorgan, Salesforce Join Growing List of Firms Dumping Office Space” from The Wall Street Journal
- “US 10-year Treasury yield hits highest level since January last year” from Financial Times
- “PayPal launches crypto checkout service” from Reuters
- “Visa moves to allow payment settlements using cryptocurrency” also from Reuters
- “How America’s ‘First Female Cryptanalyst’ Cracked the Code of Nazi Spies in World War II—and Never Lived to See the Credit” from Time magazine
- Finally, listen to Molly’s interview with Make Me Smart Question answerer Aniyia Williams.
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