THE UR IS IN THE ENVIABLE POSITION THAT BILL CLINTON WAS...:

What Did Reagan’s Inaugural Say?: “Government is not the solution to our problems; government is the problem.” (Larry Kudlow, 1/19/09, National Review)

For one thing inflation today is zero. Back in Reagan’s time it was double-digits. Interest rates today are historically low. In Reagan’s day they were 15 to 20 percent. We have suffered a tremendous oil shock, as did Reagan. But today’s shock has completely reversed. And while today’s recession is over a year old, Reagan inherited a recession that began in 1979 and didn’t end until late 1982.

Obviously, we now have the housing problem and the bank credit crunch. But some of that was present in Reagan’s challenge, too. And a recent study from the Minneapolis Fed shows that several measures of output and employment haven’t come close to the severe levels reached during many post-WWII recessions, much less the Great Depression.

Rising to these challenges, Reagan gave his Fed chairman, Paul Volcker, the political ground to stand on to slay inflation with tough monetary restraint and a strong dollar. It was a signature achievement, and it opened the door to more than 25 years of unbelievable prosperity and wealth creation. Reagan also fingered excessive taxes as a chief recessionary factor. His second great achievement was dropping the top marginal tax rate on individuals from 70 percent to 28 percent.

It’s interesting how Obama has also cast himself as a tax cutter, even though he’s not slashing marginal tax rates. He instead opts for tax credits. But there’s a similarity here to Reagan.

...he can do nothing and get credit for the coming resumption of the Reagan boom.

Posted by Orrin Judd at January 19, 2009 4:35 PM