Well, I have a long memory. One of my favorite outbursts of liberal economic angst came after the Oct. 19, 1987, stock market swoon that itself came at the end of 59 straight months of economic growth. That, incidentally, brings to mind President Ronald Reagan's joke that you could tell his economics were correct because derisive liberals "don't call it Reaganomics anymore." In "The Current Wisdom," we recorded the mainstream liberal alarums. They were, as could be expected, hackneyed, hysterical and wrong. Here is Reich writing in The New York Times: "The binge is over. It couldn't go on forever -- the quick fortunes (is he thinking about his friend Hillary Clinton's $100,000 killing in cattle futures?), 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. It's over. … And the rest of us, who pretended not to notice, are left with the job of cleaning up the mess."
Those foolish words were uttered Oct. 22, 1987. Two days before, the Times editorialized: "In a statement issued last night, the White House asserted that the 'underlying economy remains sound.' With the fire alarm wailing on Wall Street and the country anxious for leadership, it gets an astonishing rerun of Herbert Hoover. When will Mr. Reagan start fighting the fire?" Actually, the economy in that last quarter of 1987 grew at 4.8 percent. Whether Reagan rode in on the hook and ladder, I cannot recall.
Newsweek that last week of October titled its news report "Panic 1987" and led with the sentence, "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." The news story droned on, "In disquieting echoes of Herbert Hoover, Reagan and his men proclaimed that 'the economic fundamentals in this country remain sound.'"
Should I go on? The famous liberal economic pundit John Kenneth Galbraith wrote, "This debacle marks the last chapter of Reaganomics." Michael Kinsley wrote, "The Phillips Curve is about to boomerang upon us with a vengeance." New York Times columnist Anthony Lewis wrote, "The age of Reagan is over."
I believe you get my drift. The liberal chorus basically has been wrong about economics -- certainly about economic setbacks -- for a long time. Today's White House is sounding a bit like the Reagan administration in 1987, claiming that the economy is fundamentally sound. Back in 1987, the economy continued to grow until the brief and shallow recession of 1991. Today I make no prediction, but it does seem that economic fundamentals remain sound. If I am right, I do not expect to be quoted by my liberal friends in the prosperous years ahead.
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