Rob Kall: (interjecting) I've just got to say, what the Democrats (not
the Left so much as the Democrats) don't understand is Obama is to the Right of
Reagan!
Paul Craig
Roberts: Right. Exactly.
That's exactly the situation.
I'll write about something, some new atrocity from Obama, or the
atrocities from Bush and Cheney and Wolfowitz, whoever; and they'll come in and
just want to talk about Reagan. (laughs)
"Oh, it's all Reagan's fault!" There's
not too much he can do dead in the grave! (laughs)
Rob Kall: Yeah but, you know, you're not alone. I've had this conversation -- Wendell Potter,
who is the guy who used to be the public spokesman for the insurance industry,
he woke up and he turned around, and he sees things differently and he talks
about them differently; and it's clear that that's exactly what you've done,
and these people they get stuck on history, and not on who people are now! I'm proud to have you as a regular
contributor to Opednews, and very grateful that you send your articles to us to
publish.
Paul Craig
Roberts: It's a good site. You know, I always read Opednews, and I'm
glad to have 'em there. But you can see,
if you look a the comments, and not just my articles, but a lot of the
articles, because you have this 'comment' section for people, you can see what
I'm talking about. They're still fixated
on thirty years ago, or (laughs) and it's all Reagan's fault.
Rob Kall: Well, how do you explain that? What is your response to somebody who says,
"Hey! You did this under Reagan, you
were the author of trickle down economics."
That's the kind of stuff they accuse you of.
Paul Craig
Roberts: There's no such thing as
trickle-down economics. You know, I've
explained it so many times, it's in my book The Supply Side Revolution,
which Harvard University Press has kept in print since 1984, which the mainland
Chinese have just published in Chinese -- everybody in the world wants to learn
new things except these Americans! The
problem in the Reagan years originated in the Carter period. It was the result of post-war Demand
Management Economic Policy. What that
policy did was to pump up consumer demand with easy money and credit, but
suppress the response of supply with high marginal tax rates. A marginal tax rate is the rate of tax on
additions to income. So what developed
was, since after-tax return on additional output was low, corporations just let
the prices rise.
And so we had was called 'stagflation.'
It didn't pay to invest, increase output. They could make more money by letting the
pumped-up demand push up the price of the products! So that caused inflation, but since they
weren't producing anymore, there was no employment growth. And so this was known as stagflation. Everybody knew about it. It was the big discussion! I was in the Congressional Staff at the
time.
There was no solution, and the supply side of Congress said, "Oh. We have a solution." I'm the one who came up with the
solution. And the solution is, you
tighten up the monetary policy so it doesn't pump up demand so much. And you takes the brakes of the high marginal
tax rates off of output so that more is produced! And we did that. And what happened? We had twenty years of growth without having
to pay for it with rising inflation! And
when we presented this program, everybody said "Well, that can't work. You can't grow without inflation." And you see, the Fed had gone back to
it! What is Bernanke always telling
us? "If we could just get the inflation
up, the economy would be growing!" So
what we did -
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