All in all a pretty superficial analysis. Essentially NO argument beyond assertion that social transfers create problems. Surprisingly, he does not even mention structural deficits or the Nixon price controls. That regulation not guided by cost-benefit analysis is a drag on growth is plausible, but unquantified (and local NIMBY-ish, professional licensing, etc. regulations are probably much more damaging than national ones). The idea that unemployment insurance is so generous as to discourage employment is ludicrous; that Medicare is responsible for the employer "provided" health insurance disaster ridiculous. The criticism of monetary policy is correct if anachronistic; inflation targeting as the "prices" half of the Fed's mandate had not been invented. [The "inflation" criticism of Johnson for not increasing taxes to pay for Vietnam makes sense only if one presumes that the Feb accommodates fiscal deficits.]
It's not even "neo-liberal" -- use the market, where appropriate, to achieve growth with equity -- in my (Word Bank-ish) conception.
The poster boy for argumentum a fortiori. How could this have been influential? I’m not trying to be snarky. I really am curious how this sort of “reasoning” became so dominant. Certainly it’s easy to grasp, and easy to repeat. I’ve assumed that’s part of its appeal, especially for lazy yet aggressive people.
plus ça change, plus c'est la même chose - the arguments that Feldstein lays out in 1980 are just as fresh for the Republicans in 2022 as they were back then.. Of course you can take what I just said with a very health dose of sarcasm.
Obviously Feldstein decided that the oil shocks of the 1970s had no relationship to the inflation of the time either. I recall this assertion, and other like assertions, that entered mainstream thought at the time. It was common to blame the inflation of the mid- to late-1970s as it were entirely caused by "spending," especially those things that conservatives opposed, rather than the obvious shocks caused by the energy embargoes and price spikes. What was most troubling is that many liberals also completely abandoned Keynesian models, and the Chicago school, combined with the Ivy League mantra of economic financialization, became all the rage and the dominant schools of thought.
As to Thomas Hutcheson's statement below, LBJ actually *did* raise taxes to pay for Vietnam, which resulted in the Revenue and Expenditure Control Act of 1968. It was a year later than his initial request, but--still--it passed with strong bipartisan support. As a result, the FY69 budget ended in surplus, which wouldn't occur again until late in Clinton's term.
All in all a pretty superficial analysis. Essentially NO argument beyond assertion that social transfers create problems. Surprisingly, he does not even mention structural deficits or the Nixon price controls. That regulation not guided by cost-benefit analysis is a drag on growth is plausible, but unquantified (and local NIMBY-ish, professional licensing, etc. regulations are probably much more damaging than national ones). The idea that unemployment insurance is so generous as to discourage employment is ludicrous; that Medicare is responsible for the employer "provided" health insurance disaster ridiculous. The criticism of monetary policy is correct if anachronistic; inflation targeting as the "prices" half of the Fed's mandate had not been invented. [The "inflation" criticism of Johnson for not increasing taxes to pay for Vietnam makes sense only if one presumes that the Feb accommodates fiscal deficits.]
It's not even "neo-liberal" -- use the market, where appropriate, to achieve growth with equity -- in my (Word Bank-ish) conception.
The poster boy for argumentum a fortiori. How could this have been influential? I’m not trying to be snarky. I really am curious how this sort of “reasoning” became so dominant. Certainly it’s easy to grasp, and easy to repeat. I’ve assumed that’s part of its appeal, especially for lazy yet aggressive people.
plus ça change, plus c'est la même chose - the arguments that Feldstein lays out in 1980 are just as fresh for the Republicans in 2022 as they were back then.. Of course you can take what I just said with a very health dose of sarcasm.
Obviously Feldstein decided that the oil shocks of the 1970s had no relationship to the inflation of the time either. I recall this assertion, and other like assertions, that entered mainstream thought at the time. It was common to blame the inflation of the mid- to late-1970s as it were entirely caused by "spending," especially those things that conservatives opposed, rather than the obvious shocks caused by the energy embargoes and price spikes. What was most troubling is that many liberals also completely abandoned Keynesian models, and the Chicago school, combined with the Ivy League mantra of economic financialization, became all the rage and the dominant schools of thought.
As to Thomas Hutcheson's statement below, LBJ actually *did* raise taxes to pay for Vietnam, which resulted in the Revenue and Expenditure Control Act of 1968. It was a year later than his initial request, but--still--it passed with strong bipartisan support. As a result, the FY69 budget ended in surplus, which wouldn't occur again until late in Clinton's term.