From: schubert@capri.berkeley.edu (John Schubert)
Newsgroups: alt.politics.elections
Subject: Sen. Lloyd Bentsen and the Reagan Boom Years
Date: 11 Sep 1992 20:40:59 GMT
Organization: U.C. Berkeley -- ERL
Distribution: usa
Reply-To: schubert@united.berkeley.edu (John Schubert)
NNTP-Posting-Host: capri.berkeley.edu

Here is a "little" excerpt from "The Seven Fat Years and how to do it again"
by Robert L. Bartley, 1992.  It is quoted withouth permission.  It appears on
page 87-88 of the book.

In light of some of the quotes that have been appearing in this newsgroup that
came from Lloyd Bentsen when he was running for Vice-President in 1988 I found
the following very interesting.  This appears in Chapter 6, which bears the
title: Ronald Reagan.

============================= start quote =====================================

	For too long, we have focused on short--run policies to stimulate
	spending, or demand, while neglecting supply--labor, savings,
	investment and production.

	Consequently, demand has been overstimulated and supply has
	been strangled in a noose of disincentives woven of
	unnecessary regulation, taxation, inflation and codes of 
	conduct not respected by our foreign competitors.  Only
	recently have some computer models of the nation's
	economy been adapted to take those disincentives into
	consideration.

	But we must quicken the pace if we are serious about controlling
	stagflation instead of having it control us.

	I am convinced that we don't have to put people out of work to
	control inflation.  The goal of the next decade should be to fight
	inflation and unemployment through supply side incentives to put
	more goods on the shelves.  That's the way to cut prices and boost
	employment.

	A recent JEC study demonstrates that supply incentives--even those
	which do not stimulate demand or widen the deficit--can lead to
	job creation, productivity gains and reduced inflation.


These words were uttered in May 1980, in the midst of the presidential
primaries.  But they do not come from a stump speech by presidential aspirant
Ronald Reagan.  Rather, they come from a press release issued by the
congressional Joint Economic Committee, relating the words of its Democratic
chairman, Sen. Lloyd Bentsen.

Yes, this was the same Lloyd Bentsen who eight years later complained of
the "ultimate epoch of illusion," who summed up the Reagan years as "a time
when America tried to borrow its way to prosperity" [from his vice-pres.
acceptance speech]  To judge by the rhetoric, by the time he became a vice-
presidential candidate, the senator had forgotten a lot of what he'd learned
in 1979 and 1980, when his Joint Economic Committee issued reports that
unified Republicans and Democrats.  In releasing the 1980 report, Senator
Bentsen bragged, "The JEC is on the cutting edge of a new approach to
economic policy.  In 1979, we were a pioneer of the concept of supply side
economics"

To be fair, what "supply-side economics" meant to some members of the
committee, say Sen. William Roth of Kemp-Roth fame, is not necessarily
precisely what it meant to others.  Senator Bentsen had in mind tinkering
with the corporate tax structure by increasing the investment tax credit
and accelerating depreciation schedules.  It's true that such modest cuts
would not have been expensive in foregone revenue, though one can doubt
whether their economic effects would have been powerful enough to break
the momentum of stagflation.

It was one of the ironies of the tax debates of 1980 and 1981 that the
Republicans became populists while the Democrats sought to favor corporate
interests, and even investors directly.  Democrats instinctively sought to
shape tax cuts into industrial planning, believing in the government's
ability to direct money to its best uses.  Republicans, fighting against
the politician's natural instinct to hold on to power, sought to return
money to the private sector and trust market forces to find the best outlets.

Yet whatever the differences, Senator Bentsen's supply-side rhetoric showed
that, in 1980, much was agreed.  That is to say, the Reagan economic program
by no means came out of the blue.  The language of the Joint Economic
Committee reports of 1979 and 1980 is remarkably similar to the Reagan Campaign
Policy Memorandum No. 1, discussed below.  In 1980, Senator Bentsen and Ronald
Reagan spoke the same language.  This language grew directly out of the
intellectual ferment of the decade; it was a response to the economic crisis
of the 1970s.

This is not to take anything away from Ronald Reagan, a remarkable figure.
Given the popular image of a detached role-playing president, few noticed
that Ronald Reagan held a degree in economics.  As it happens, his successor
as president also had been an economics major as an undergraduate.  But where
George Bush was graduated from Yale in 1945, Reagan had the advantage of 
having been graduated from Eureka College in 1932.  That is to say, the
economics he was taught was untouched by the Keynesian revolution, and
thus appropriate to the problems of the 1980s.

================================= end quote ====================================

-John

John Schubert
schubert@united.berkeley.edu