Special Current Wisdom/The Prophets of October 19
Jackasses, The Same Old Assorted
SPECIAL CURRENT WISDOM THE PROPHETS OF OCTOBER 19 Half a year after the historic Stock Market Kaboom of 1987, and upon receiving word that what was then fifty-nine straight months of economic...
...approach was a considered strategy to avert panic...
...It couldn't go on forever—the quick fortunes, the midnight raids and computer driven program trades, the junk bonds, poison pills, leveraged buyouts, options—all the glitz and glamour, the danger and thrill...
...Reagan seems to invite the thought that he has found a new model, the Salesman, in the last act, standing on a stage about to go dark...
...October 20, 1987] New York Times Robert B. Reich, a professor: The binge is over...
...Many have hangovers...
...The first day, he shouted that the economy was in good shape...
...Incidentally, the Consumer Price Index rose a mere 0.23 percent for the month of February, and the GNP rose 4.8 percent for the final quarter of '87—not bad for Reaganomics six months after the crash, eh?: Newsweek News story titled, "Panic of '87": If it felt like the end of a world, that's because it was: last week's global crash has created a whole new financial reality...
...Embarrassed aides were explaining that his "Who-me, what-crisis...
...Hyman P. Minsky, another professor: Although the huge financial shakeout we have just experienced was not inevitable, it was to some extent predictable...
...Reagan...
...The reason for the disregard is no great mystery...
...They seem to have dug out the old script...
...October 22, 1987] Newsweek H. Ross Perot, too: We are on a nonstop binge, punishing our economy...
...Let's say they did it through a 20-cent-a-gallon gasoline tax for about $20 billion, trimming middle class entitlements another $20 billion (ending the tax exemption for Social Security payments is almost enough to do this alone), and raising tax rates one percent for another $20 billion or so...
...It's over...
...SPECIAL CURRENT WISDOM THE PROPHETS OF OCTOBER 19 Half a year after the historic Stock Market Kaboom of 1987, and upon receiving word that what was then fifty-nine straight months of economic growth is now sixty-five straight months of economic growth, The American Spectator in the best tradition of investigative journalism reprints the funeral announcements from the Kaboom's immediate aftermath...
...Still, in a clairvoyant article in the Atlantic last winter, nine months before the crash of 1987, Galbraith set out what he saw to be alarming parallels to 1928...
...Conservatives like to accuse liberals of a "Beltway mentality'=a removal from the reality that lies outside the golden circle But inside the Beltway is where the blinding mist of Reaganism has been the thickest...
...Or, "If you're so smart, how come everyone else is getting rich...
...October 22, 1987] Newsweek Clairvoyant John Kenneth Galbraith, con brio: This debacle marks the last chapter of Reaganomics...
...The prospect of the present administration doing anything is hampered by the fact that it believes that God is a Republican and will handle things...
...The president hates to say the party's over...
...It requires neither courage nor prescience to predict disaster," he writes on the first page of "The Great Crash: 1929," which Houghton Mifflin is reissuing this month...
...November 9, 1987] New York Times Dr...
...October 21, 1987] Time Lance Morrow, poet-in-residence: A political scientist, Michael Nelson, has observed that the Presidents from Franklin Roosevelt to John Kennedy were generally portrayed as Saviors...
...Conservatives actually thought they had abolished the Phillips Curve...
...October 21, 1987] Washington Post Miss Mary McGrory, teetotaler: The usual way of handling crises at the White House—at least since Herbert Hoover—has been for the president to call in the wise men to the Oval Office, sit them down and tell them to fix it...
...In 1929 every high member of the Hoover administration rushed to say that the economy was "fundamentally sound...
...The financial experts and politicians who appeared on television, people of both parties, showed no expectation of leadership from Mr...
...The second day, he said it was all Congress' fault...
...That is not Ronald Reagan's style...
...November 2, 1987] Philadelphia Inquirer And the editorial writers: Five years of economic prosperity, in which unemployment has steadily dropped while inflation has remained surprisingly low, has infused much of the nation with a false sense of well-being...
...It was as if they were embarrassed to mention his name...
...Reagan start fighting the fire...
...October 22, 1987] Washington Post Michael Kinsley dons his green eyeshade and takes the high road: Imagine if the president and Congress had agreed last summer to cut the federal deficit by $60 billion...
...The jackasses are clearly identifiable...
...Reagan as a person, thinks he has any sense of economic reality...
...Many have worse...
...It was the crumbling of public support for Ronald Reagan...
...And President Reagan, who gives every evidence of being totally out of touch with reality, told reporters: "I don't know what meaning it might have, all the business indexes are up—there's nothing wrong with the economy...
...March 30, 1988] 50 THE AMERICAN SPECTATOR MAY 1988...
...The point is this: can anyone doubt that such an achievement would have prevented the crash...
...November 2, 1987] New York Times An editorial: In a statement issued last night, the White House asserted that the "underlying economy remains sound...
...In disquieting echoes of Herbert Hoover, Reagan and his men proclaimed that "the economic fundamentals in this country remain sound...
...But the financial community is ready to admit that it is the morning after the biggest binge in its history...
...That is exactly what I seem to be hearing these days...
...When will Mr...
...Practically no one in this country, not even those who admire Mr...
...October 22, 1987] New York Times Anthony Lewis, Boston: The noise you heard was not just the crash of the market...
...October 20, 1987] Washington Post Hobart Rowen, ironist: In a sense, it was the Reagan Revolution come full circle: the excesses of the past six years, visible in deficits near $200 billion a year in both the budget and trade, couldn't go on forever...
...Now, the joy ride is over, but so far, the staggering record stock market collapse . has been met with government denial reminiscent of 1929...
...It's outrageous that our elected officials say the fundamentals of the economy are sound...
...That may not be an ideally fair and efficient formula...
...The age of Reagan is over now, no matter what happens...
...In a moment of frightening crisis, the President of the United States was treated as essentially irrelevant...
...But now it's morning and the binge seems to be over...
...The economy is fundamentally sound," said Treasury Secretary James A. Baker III...
...And the rest of us, who pretended not to notice, are left with the job of cleaning up the mess...
...That much-mocked concept, which holds there's a tradeoff between avoiding inflation and avoiding recession, also expresses the broader principle that economic policy choices cannot be pain-free...
...It's just one of many possible variations on the theme of getting America's appetites back under control...
...Johnson and Nixon were cartooned as Satans, and Ford and Carter as Samsons—weak Presidents shorn of their strength...
...With the fire alarm wailing on Wall Street and the country anxious for leadership, it gets an astonishing rerun of Herbert Hoover...
...Nevertheless, this is hardly an occasion for gloating...
...none of the fundamentals are sound...
...As 20th century history shows, a period of conservative Republican dominance leads to a failed capitalism, while a period of liberal Democratic dominance creates and sustains the conditions for successful capitalism...
...The third day, he said that only people who refused to buy—and, of course, the press—could bring on a recession...
...The Phillips Curve is about to boomerang upon us with a vengeance For years the doom-and-gloomers have had to endure the taunt: "What do you know that the stock market doesn't...
...November 2, 1987] Washington Post And even today, the true believers still believe: Galbraith is uncharacteristically modest about his predictive powers...
Vol. 21 • May 1988 • No. 5
