You have to remember that being a political leader is arguably the hardest job in any country. First, it is incredibly hard to know what the right policies are, since experts almost always disagree. Second, even if you know the perfect policies, it is very hard to get elected to the top job. Third, even if you do that, it is hard to implement these policies due to other people having vested interests, or being stupid and thinking your policies aren't good. Fourth, even if you do all that, you can lose office due to random chance, scandal, or just people not liking you personally. Before Reagan and Thatcher took power, the US and UK were in a total fucking mess due to terrible central bank policy and excessive socialism in the 70s, and there was a serious threat of the rest of mainland Europe being invaded and conquered by the USSR, the west had little military credibility after Vietnam, Soviet invasion of Afghanistan, and the Iranian hostage crisis,. There was also serious risk of WWIII, in fact we came pretty close to it one time. Conventional wisdom then was big government, appeasement, and that communism was a viable alternative to capitalism or social democracy. Half the world was allied with the USSR or looking to it as a political model. Within 10 years almost all of this had done a 180 degree flip. The cold war ended, tax and inflation came to reasonable levels, unemployment dropped significantly, economic stability improved significantly, and communism died in almost all countries except N Korea and Cuba. Half a billion people went from slaves to free citizens of relatively free and peaceful societies. Reagan's decision to ramp up the Cold War and attempt to roll back the state - both daring minority positions going strongly against conventional wisdom - played a considerable role in achieving a lot of that. To say that Reagan "obviously made mistakes" is trivial, since perfection in politics is literally impossible, much more so than in trading or any other field. However, I'd be interested when comparing the USA in 1980 to 1989, did it become a better or worse place? What about the world in general? What other potential presidential candidates at the time would have been able to contribute to the improvements listed above? How many would have done nothing or made things worse? It is easy to criticize in hindsight, but that makes about as much sense as saying what the ideal trades for 2008 were - it is totally useless since you can't make politics years after the fact any more than you can trade using last year's prices.
First off Krugman is a kook. He wasn't awarded a Nobel Prize because of genius-he's of pedestrian mind-he is lionized solely because of his leftist political posture. Krugman winning a Nobel says everything you need to know about the Nobel committee. Krugman's appeal to an influential if not an economically literate audience is much paralleled with the problems America, the dollar and free markets face going forward from left wing inflationists. The 30 year Treasury Bond is the final say arbiter of an administrations fiscal policy and Bond prices doubled in Reagan's first 6 years. Stocks tripled. The whole mood of the country changed. Private debt crises are no different than any other bubble. Capital is looking for higher than government issued rates of return and the number of worthwhile deals is often less than the amount of market available liquidity. Paradoxically investors and institutional managers then chase crummier and crummier assets up to the highs. I'm looking for a great quote from Michael Millikan about this but I can't find it. Essentially Millikan say's "the first high yield deals at Drexel involved outstanding companies but as new investors emerged seeking more bonds it became difficult to continually find credit worthy balance sheets. Later in the game much of the new issuance sucked." That's the process-winners and losers-and it MUST stay that way. The tweaking should do with no more bailouts. But since Krugman is the interventionist, Big Brother bailout king he should then LAUD Reagan if he thinks Reagan cost the taxpayers money.
There you go son. Let it out. http://www.huffingtonpost.com/2009/02/17/paul-krugman-stimulus-too_n_167721.html
. June 4, 2009 SouthAmerica: Reply to NeoRio1 On your last posting it appears that you are quoting one of my postings, but in reality you made up that information. Your quote: "[B I am an idiot! I am an idiot because I advocate a Krugman article that is against deficits while knowing in full that Krugman advocated a stimulus package twice the size of the one passed a few months ago!" I know that is not my writing because of the style of writing on that quote. .
well, that is new to me - at least since 1968... http://en.wikipedia.org/wiki/Nobel_Memorial_Prize_in_Economics
I was merely pointing out the absolute comedy and hypocrisy of Krugman and yourself. If you looked at my article Krugman advocated a stimulus package twice the size of the one passed a few months ago. Now krugman is advocating smaller deficits. Do you not see a problem with that? If you don't then you must have a problem with your brain.
The problem with South America's brain is that he is trying to advance his political agenda by posing as an 'objective' economist. When contradictions arise, he simply ignores them. Military spending during Bush ~3.8 Trillion Social welfare spending ~ 9 trillion Housing and Credit Bubbles>> cost of military yet he blames the military for america's money woes, assinine to anybody with a functioning brain. The constitution binds to the goverenment to spend on defense, it says nothing about social welfare spending. SA thinks though that medical care is a right. It's quite obvious that he is a left wing america hater, although he thinks he is hiding it because in his own mind he is being rational.
I too found that article in the NY Times suspect, to go back some 20+ years to point blame is worthless, other than from an academic perspective. the only problem is no one lives in an academic perspective, we all live in the real world. what was done under Reagan had support, to now criticize its policies based on how things have turned out does little for the mindset in dealing with the realities of today.... clearly policies enacted have short lifespans, so the challenge is what next to do based on facts in evidence, not facts derived from looking back 20+ years... after all, we just got handed 8 (eight) years of lopsided policies that have caused directly, these depressions, recessions, bankruptcies and fiscal crisis all across the board.... we certainly have more than enough to deal with, and hopefully, prayerfully, wishfully survive.....