Reagan’s Economy

Spokesman for the Clinton campaign, one-time economist, New York Times columnist Paul Krugman attempts to denounce Barack Obama for even mentioning Ronald Reagan without espousing anger and hatred towards “history’s greatest monster”. Krugman’s complaint:

The Reagan economy was a one-hit wonder. Yes, there was a boom in the mid-1980s, as the economy recovered from a severe recession. But while the rich got much richer, there was little sustained economic improvement for most Americans. By the late 1980s, middle-class incomes were barely higher than they had been a decade before — and the poverty rate had actually risen.

Since I have access to the internet, I thought I would take five minutes to check Krugman’s facts, which are all misleading (I can’t call them false, because it is unclear what he is measuring. Some point in the late 1980’s to some point a decade earlier? Is he comparing the Reagan economy to what it was before stagflation under Jimmy Carter? )

Under Reagan (1981-1989)

• The poverty rate fell from 14% to 11.8%
• Family poverty fell from 11.2% to 10.3%
• The middle 20% of households’ income – in inflation-adjusted, 2006 dollars – rose from a range of $32,000 – $49,000 to $36,000 – $55,000

Any basic look at the economy will tell you that we had recession/slow growth from 1978-83, growth from 1983-90, recession in 91-92, growth from 93-2001, recession from 2001-03, and growth since. Krugman would argue that Reagan deserves no credit for the economy during his presidency (or since), but Clinton deserves all the credit for the 1990s economy, Bush & Bush should be blamed and shamed, but Carter should not. Sense a pattern?