Econ 488: The Advanced Macro Adventure!

As Greenlaw said in class today, it is difficult to disentangle Reagan’s economics from his politics. I have thus far read two of his speeches: one from 1964 when he’s advocating presidential candidate Goldwater, one from 1983 when he was addressing the Heritage Foundation.  I also skimmed through an address he made to the national Evangelical church association, or some organization like that. My favorite line from that one was: Girls termed “sexually active” — and that has replaced the word “promiscuous” — are given this help in order to prevent illegitimate birth or abortion. This statement was in his argument of how planned parenthood-type organizations should be required to inform parents of girls who they were providing birth control to, and how the morality of the issue is greater than the respect for these girls privacy (this is how he phrases it, by the way, not me this time!). Granted, I’m sure that to some extent he had adjusted his language to appeal to his audience. Regardless, I find it a bit inconsiderate to assume that minors who are sexually active are necessarily promiscuous. This isn’t an economic argument, but I feel it is still important.

The article from 1983 was the first I read, and was intended as an address to the members of the Heritage Foundation but felt more like Reagan advocating his own policies. Apparently the economy was doing well at this point, having emerged from the recession of ‘82 (possibly ‘81, I’m not sure). He boasted that no one was using the term “Reagonomics” anymore because his policies were working. By cutting the federal budget by 40%, most of which was from welfare, he was able to give tax breaks of 25%. On the bright side, his administration did decide to work inflation indices into the tax system to ensure that people were not being taxed too much for their salary. He switches to discussing the Cold War, and the threat from the Soviets. It’s easy to see how his demonization of  socialist policies fueled his economic policy seeking less government involvement and fewer welfare programs. The Soviet Union was clearly not upholding the ideals it had been founded upon, and instead of acknowledging this inconsistency Reagan decided to not only identify the reality of the Soviet Union as the enemy, but also the sham ideals they were supposed to represent. He closes by discussing how America has become a city on a hill; given his audience, this is acceptable… but may not make for the best international policy of all time. Another oddity was that he glorified conservative thought and the possibilities it presents for our nation, but never really clarifies what exactly conservative thought is. He even at one point just says “I know it when I see it.” It seems that a general school of thought that is supposedly the beacon of success for our nation should be more identifiable than that.

The second real article I read was from 1964. Reagan didn’t discuss supply-side economics as much in this one, however he seems to already be teasing out the details of that theory, despite his goal being to advocate Barry Goldwater. He describes America as, more or less, the Mecca of freedom and the ONLY source of hope for those living in injustice. He attacks recent regimes for failing to balance the budget in 28 of the previous 34 years, and for allowing inflation to get out of hand. Most of all, he attacks government welfare, taxes, and subsidizing. When discussing agriculture, he is distraught that farmers have been put out of business while more government officials in the agriculture department are being appointed. He considers subsidies a waste of money, as the government is effectively paying people to not grow things on their land. It reminds me rather of a part in Catch-22 where one character specializes in not growing alfalfa and exploits the government  by using his subsidy money to purchase more and more land to not grow alfalfa on. From this I gather that he would prefer a free market for agricultural produce, which may drive prices down because of an increase in the surplus of goods. The subsidy is more or less an insurance mechanism for the farmers from what I understand, and saves them from their own profit-maximizing behavior.

He considers welfare a source of government expenditure that has gotten WAY out of hand, and highlights the difference between the sum of money that is being put into welfare programs and the sum of money that ends up making its way to the hands of those stricken with the burden of poverty. Given the number of impoverished people (defined as anyone making less than $3,000 per annum) and the amount of money that is going toward welfare programs, these individuals should be receiving an extra $4,600 on top of their $3,000 maximum, making them no longer impoverished. Instead they are receiving about $600, because the government has again assigned itself the task of saving people from themselves and establishing PROGRAMS instead of unregulated hand outs. While I agree that people take welfare for granted, it’s more responsible to spend the extra money to establish programs as opposed to giving potentially financially irresponsible people income they haven’t had to work for without any restrictions as to its use. This goes along with his rather exhausted theme of wanting to reduce the influence of government in all aspects of society. I say exhausted because he discusses this point ad nauseam in the remainder of the speech.

All of that sounds a little snide. Reagan’s speeches rub me the wrong way, but I don’t mean to attack him as a person. Also these are just my reactions to what I’ve read. Maybe I’ll appreciate his policies more as I continue to read, but it doesn’t look promising right now. I think I just dislike how politicians speak in general… so that might also do it. Anyway, I’m just making sure no one thinks I’m attacking Reagan personally, because sometimes people get really combative about that.