Hey Reaganites: Are we better off?

Ask a conservative - especially a middle-aged conservative - why liberal economic policies don't work, and chances are he'll bring up the 1970s. "Remember the bad old Carter years?," he'll say. Stagflation! Sinking stock markets! To many conservatives, the triumphal moment in modern politics was when Reagan swooped in to deliver us from the malaise of the 70s.

But that argument will never, ever work again. The reason is that we have just left behind a decade in which conservative economic policies - low taxes, deregulation, privatization - were implemented far more even than in the Reagan years. And, economically speaking, this decade was a massive, colossal, flaming muti-car pile-up.

I'll let Neil Irwin give the specifics:

For most of the past 70 years, the U.S. economy has grown at a steady clip, generating perpetually higher incomes and wealth for American households. But since 2000, the story is starkly different.

The past decade has been the worst for the U.S. economy in modern times, a sharp reversal from a long period of prosperity...

There has been zero net job creation since December 1999. No previous decade going back to the 1940s had job growth of less than 20 percent. Economic output rose at its slowest rate of any decade since the 1930s as well.

Middle-income households made less in 2008, when adjusted for inflation, than they did in 1999 — and the number is sure to have declined further during a difficult 2009. This has been the first decade of falling median incomes since figures were first compiled in the 1960s.

And the net worth of American households — the value of their houses, retirement funds, and other assets minus their debts — has also declined when adjusted for inflation, compared with sharp gains in every previous decade since data was initially collected in the 1950s.

By any reasonable measure - GDP, median incomes, net worth, employment, or the value of the stock market - the Bush years were far, far worse than the Carter years. Any time a conservative mentions Carter, a liberal can now mention Bush, and the conservative instantly loses the argument.

Conservative response #1: "But Bush had to deal with the dot-com bust, 9/11, and the financial crisis!"

True, and Carter had to deal with the oil embargo, the global productivity slowdown, and an inherited recession of his own. What's good for the goose...

Conservative response #2: "Yeah, but inflation was higher during the Carter years!"

True. But why is inflation bad? Is it because inflation slows GDP growth? That's certainly true, but we know that growth was much worse under Bush than under Carter, so there goes that argument. Or is inflation bad because it redistributes wealth from net savers (rich people) to net borrowers (poor people)? Yeah, well, cry me a river...in my mind, fairness has to take a back seat to overall national economic performance.

Conservative response #3: "Bush didn't really implement true conservatism, because he increased spending."

Ha. This is like communists arguing that the Soviet Union wasn't really communist. If Bush wasn't conservative, then there is no chance of ever having a conservative president in reality. Bush cut taxes to the bone, slashed far more regulation than Reagan ever did, and privatized a ton of government functions (including the military!). Yes, he increased Medicare spending, but the vast bulk of his spending was on the military and homeland security. To argue that our economy would have done just fine without Bush's small Medicare expansion is to stretch the bounds of credibility until they snap.

Conservative don't want to admit this, but the important question is still the one Reagan asked thirty years ago: Are we better off? And the answer is "No." In fact, we are very much worse off after a decade of conservative policy. Jimmy Carter must be feeling just a little vindicated right now.