From: burleigh@ogre.cica.indiana.edu (Frank Burleigh)
Subject: Re: A "New" Reich
Organization: Indiana University
Date: Sun, 8 Nov 1992 21:39:02 GMT

In <1992Nov8.123301.1@ulkyvx.louisville.edu> cdpert01@ulkyvx.louisville.edu writes:

>     On This Week with David Brinkley, Clinton economic advisor
>Robert Reich said that the current recession is not as deep
>as the 1981-1982 recession.  This does not seem consistent
>with the "worst-economic-conditions-in-50-years" theme I 
>continually heard from the Clinton campaign.  Secondly, Reich

There is no unconsistency: you could characterize an economic
downturn in terms of its depth and/or of its length.  If you 
average real economic growth over the Bush years you'd find
little to no growth is compared with other periods.  You'd also
find little to no jobs creation.  The '81-'82 recession was, on
the other hand, shorter but deeper.  In other words, the extent
of the real decline in real product was greater than the worst
quarter of the recent recession, and peak unemployment was near
to 11 percent in one month of the '81-'82 recession (Dec, '82?)
but never approached that level in the recent recession.

Of course these characterizations are difficult because there
are official indicators, and then there are others that people
may care more about.  For example, recession is indicated by
several quarters' worth of declining real product; unemployment
doesn't figure in the definition.  In '82-'83 growth began but
unemployment remained pretty high for a long time.  So if you
judge a period by, say, growth, the first Reagan term might not
look so bad, but if you judge by unemployment, it looks pathetic.

The recent period is characterized by both low/no growth and by
relatively high unemployment.  So that's probably how Reich sees
it.  I would look at it that way.

To add yet more subtlety, in terms of raw numbers the period just
after WWII was probably worse than anything we've seen since in
terms of both growth and unemployment (not sure about the latter)
but we know not to compare that period with the rest because there
is a qualitative difference, i.e., radically reduced military
spending and employment.

>said that although Clinton did promise a middle-class tax
>cut, it really wasn't a *salient* point.  Once again, I remember
>Clinton campaign ads *trumpeting* that the middle class would
>"get a break" under a Clinton administration.

During the early primaries they were talking about a middle class
tax cut but I just read that Clinton was never happy with that.
The plan was revised to either temper or remove that from the plan
by the time of the later primaries.  Giving the middle class "a
break" could take many forms beyond or besides tax cuts.  It's
certainly not clear to me that with deficits such as we have that
general cuts would be a good idea right now.  Of course if you
try to cut spending you'll necessarily step on somebody--probably
the middle class itself--and there will be all hell to pay.  Reagan
learned this in his first term when even Republicans wouldn't go
along with the modest cuts sometimes proposed.

>     Just think what we'll hear *after* the inauguration....

It ought to be interesting.

--
Frank Burleigh
Department of Sociology, Indiana University, Bloomington, IN  47405
CIS 72730,1017; Internet burleigh@ogre.cica.indiana.edu; Bitnet burleigh@iubacs
Newsgroups: alt.politics.clinton,alt.politics.bush