From: goykhman_a@apollo.hp.com (Alex Goykhman)
Subject: Re: Derailing the Reagan Revoltion, part I: Reverse Reaganism
Date: Wed, 19 Aug 1992 16:43:49 GMT
Organization: Hewlett-Packard Company, Chelmsford, MA

In article <1992Aug19.093945.9023@dscomsf.desy.de> Hallam@zeus02.desy.de writes:
>
>|>	Nobel Prize-winning economist Milton Friedman
>
>His ecconomics prize is not from the institute that Nobel set up, it is a
>separate, entirely bogus enterprise set up to honour right wing looney tunes.
>
>|>        Does this mean that you're disappointed in Bush?
>|>
>|>        [Laughs.]  Disappointed is putting it very mildly.  I believe the
>|>Bush
>|>presidency has been very close to a disaster.
>
>Well he's right there.
>
>|>        Reagan when he came into office had four basic points: one, reduce
>|>marginal taxes; two, reduce regulation; three, restrain government spending;
>|>four, have a stable and noninfaltionary monetary policy.  And while he did
>|>not
>|>achieve them to the extent to which I would have liked, he did achieve a
>|>great
>|>many of them.
>
>Running up the worlds largest budget deficit in the process. Derregulation
>caused the S&L disaster. 

    The budget deficit by itself is not a problem.  Goverment borrowing
    increases real interest rates and, in that sense, has had the same 
    (detrimental) effect on the economy as a tax on interest rates would 
    have.

    Goverment spending is the real problem, because every dime goverment
    spends comes from taxes (remember, gov. borrowing=taxation).  Under Reagan,
    the rate of gov. spending growth went down significantly, and we could both 
    enjoy economic growth, and have a large (though shrinking) deficit.

    Under Mr.Bush, government spending has been going up more rapidly 
    than under any other president since FDR.  Not suprisingly, we are
    "enjoying" the lowest rate of economic growth since the Great Depression.
    Mind you that, unlike FDR, GHWB inhereted a growing economy...

>
>It's not unusual for men of 80 to be entirely disconnected from reality and
>unable to accept a flaw in their pet theories. ...

    To the contrary, Milton Friedman's theories are well supported by
    the economic realities throughout the world.

    Compare that, for example, to a theory of economic productivity
    that another Nobel Prize Winner Paul Samuelson was advancing.
    He once stated that "people in Eastern Europe and the SU are more
    productive, because they spend more time working [don't go on strike]"
    He must have gotten his NB from the same "entirely bogus enterprise 
    set up to honour right wing looney tunes" (I wish they had taken
    his high school diploma away instead:).

    P.S. In case you wonder where I got this wonderful quote - a while
    back (during the "glasnost" years) Barron's printed a whole bunch 
    of idiotic statements like this made by prominent Western politicians,
    economists, bankers, journalists, etc.






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