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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: bentway who wrote (26566)	1/17/2005 7:36:37 PM
From: patron_anejo_por_favor	Respond to of 306849

<<There may be some trickle down here, to masseuses, poolboys and gardeners, etc.>> Good times ahead for bunion-rubbers everywhere!<G>

To: bentway who wrote (26566)	1/17/2005 10:28:29 PM
From: JF Quinnelly	Read Replies (1) \| Respond to of 306849

Dubya fired the one expert he had on Reagan's actual program, Larry Lindsey. It looks to me like Lindsey refused to low-ball the cost of the Iraq War, and got fired for refusing to be a yes-man. It does look like Dubya buys into the "supply-side myth", where deficits don't matter. That wasn't a view shared by the Reagan economists. The goal of their program was to solve the stagflation that had plagued the Ford and Carter years. Keynesian demand side stimulus had resulted only in increasing inflation in the '70s. Academics like Craig Roberts argued that the problem could be solved by shifting the supply curve to the right, allowing future stimulus to go into growth instead of price. Senator Lloyd Benson, Dukakis' future VP, was the first major politician to back supply side policies. The goal was to get the economy growing and to break inflation. Paul Volker killed inflation by stifling credit. Investment tax credits and marginal tax rate cuts spurred domestic investment, shifting the supply curve rightward and increasing the production possibility frontier, to use a model from econ 101. My own feeing is that they are "trickling down" to workers in India, China and other locations featuring cheap labor. Reagan's advisors didn't have to worry about competition from COMECON and Red China, nor a globe spanning internet. Dubya better figure out that pitting the American workforce against the entire world is a whole different matter.