The Boom Of '82 Still Resounds
January 27, 2000
Former Federal Reserve governor Lawrence B. Lindsey says the phenomenal economic expansion we enjoy dates to 1982. There was a brief and mild recession in the first years of the last decade, then an almost continuous 17-year boom (excepting one or two quarters during the Bush administration).
- In the course of this 17-year expansion, real per capita consumption has risen 36 percent -- and almost 35 million jobs have been created.
- The Dow Jones Industrial Average has risen 13-fold.
In the early 1980s, the economy was energized as it never had been before. A new view of the economy came to dominate public policy -- a view that differed from the old in major ways.
- Successful deregulatory experiments in transportation served as a model for deregulation of other industries -- including finance and energy.
- Capital gains tax rates were reduced in 1978, and ordinary income tax rates were cut in 1981 and 1986.
- Economists came to see "supply side" management of both inflation expectations and the supply of labor and capital as at least as important as "demand side" management of spending power.
"In terms of economic performance, government policy and effect on the thinking of professional economists, the 1980s form a continuous era radically different from what preceded it," Lindsey writes.
Source: Lawrence B. Lindsey (American Enterprise Institute), "The 17-Year Boom," Wall Street Journal, January 27, 2000.
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