JONATHAN CHAIT MARCH 22, 2011
Steve Forbes expounds upon the glorious Reagan supply-side revolution:
Critics howled that Reagan was being financially irresponsible, but the president pressed on. Once his cuts were fully phased-in and the hard fight against inflation was won, the economy took off like a rocket. Reagan's achievements set up a great, long boom in the U.S. and the world that didn't end until the economic crash in 2007.
This credits Reagan for the 1990s boom, which was by far the most prosperous part of the period in question. But of course when Bill Clinton raised taxes on the rich in 1993, conservatives like Forbes decried it as the end of Reaganism. Forbes magazine was running articles urging rich people to flee the country to escape the economic ruin Clinton's Bolshevism would bring. The supply-siders have responded by simply air-brushing the whole episode out of history, while still continuing to maintain that restoring Clinton-era tax rates on the rich would bring economic ruin.
President Reagan understood, and fervently believed in, the American spirit of free enterprise. So far, President Obama hasn't shown that he does.
Mr. Obama still has time to learn the real lessons of Reagan's success. Will he?
That question is easy to answer. If the economy struggles, then Obama will have failed to learn The Lessons Of Reagan. If it prospers, it will be because Obama Moved To the Center. We will see whether we're in a long economic downturn that signals a retreat from Reaganism, or the beginning of a recovery that signals its continuation.