Dean Baker: The real effect of 'Reaganomics'

[marmar]

from the Guardian UK:




The real effect of 'Reaganomics'
Ronald Reagan promoted the idea that conservatives prefer to leave the economy to the market. Nonsense – we've been gulled

Dean Baker
guardian.co.uk, Monday 7 February 2011 18.30 GMT


At the 100th anniversary of Ronald Reagan's birth, his most important legacy has gone largely overlooked. Reagan helped to put a caricature of politics at the centre of the national debate and it remains there to this day. In Reagan's caricature, the central divide between progressives and conservatives is that progressives trust the government to make key decisions on production and distribution, while conservatives trust the market.

This framing of the debate is advantageous for the right, since people, especially in the United States, tend to be suspicious of an overly powerful government. They also like the idea of leaving important decisions to the seemingly natural workings of the market. It is therefore understandable that the right likes to frame its agenda this way. But since the right has no greater commitment to the market than the left, it is incredible that progressives are so foolish as to accept this framing.

In reality, the right uses government all the time to advance its interest by setting rules that redistribute income upward. As long as progressives ignore the rules that are designed to redistribute income upward, they will be left fighting over crumbs. There is no way that government interventions will reverse a rigged market. For some reason, most of the people in the national political debate who consider themselves progressive do not seem to understand this fact.

To take the most obvious example: fighting inflation has come to be seen as the holy grail of central banks – a policy that it is supposed to be outside of the realm of normal political debate. On slightly more careful inspection, the inflation-fighting by the Fed and other central banks is actually a policy that is designed to ensure that the wages of ordinary workers do not grow too rapidly. .............(more)

The complete piece is at: http://www.guardian.co.uk/commentisfree/cifamerica/2011/feb/07/ronald-reagan-republicans

[n2doc]

1. CONservatives use Government as a cash source for the "market"

And to manipulate markets in order to maintain and strengthen monopolies. Nothing "free" about any of it.

[Overseas]

2. K&R! Excellent! //nt