The New American Economy: The Failure of Reaganomics and a New Way Forward [Hardcover]

Bruce Bartlett (Author)

Book Description

Release date: October 13, 2009

As a domestic policy advisor to Ronald Reagan, Bruce Bartlett was one of the originators of Reaganomics, the supply-side economic theory that conservatives have clung to for decades. In The New American Economy, Bartlett goes back to the economic roots that made Impostor a bestseller and abandons the conservative dogma in favor of a policy strongly based on what’s worked in the past. Marshalling compelling history and economics, he explains how economic theories that may be perfectly valid at one moment in time under one set of circumstances tend to lose validity over time because they are misapplied under different circumstances. Bartlett makes a compelling, historically-based case for large tax increases, once anathema to him and his economic allies. In The New American Economy, Bartlett seeks to clarify a compelling and way forward for the American economy.

Editorial Reviews

Review

Praise for The New American Economy:

 

“Bruce Bartlett is a rarity in Washington, an honest man. In The New American Economy, Bartlett combines an informed insider's knowledge and an economic historian's perspective to create a compelling explanation of where supply side economics came from and what went wrong with Reaganomics.”
—David Cay Johnston, Pulitzer Prize-winning author of Free Lunch and Perfectly Legal

 

“Bruce Bartlett is right. The welfare state isn’t disappearing. And if Republicans continue to try to roll it back the by using tax cuts to “starve the beast” or trying to privatize Social Security and Medicare, they’re history. Wise thoughts from one of the creators of Reaganomics who has seen the light.”

—Robert Reich, Former U.S. Secretary of Labor, Professor of Public Policy, University of California at Berkeley 

 

“Among today's conservatives, only Bruce Bartlett would have the courage and unconventionality to embrace John Maynard Keynes, much less to champion a big new tax. But here's the thing: he's right. Anyone seeking a new way forward for conservatism or the economy needs to start here.”
—Jonathan Rauch, National Journal

 

“Bruce Bartlett, who took the measure of President Bush in his New York Times bestseller, Impostor, has written another highly useful winner:  The New American Economy.  In this short, tough-minded and often amusing book, he lays out what the Obama Administration is doing to the economy and tells why it will work.”
—Richard Whalen, Senior policy adviser to Ronald Reagan and author of The Founding Father: The Story of Joseph P. Kennedy

 

“Bartlett is the rarest of all creatures: an honest conservative economist. He was one of the original supply-siders in the Reagan administration. However, he pursued it as economic policy, not religion, which meant that he changed his views when things did not turn out exactly as planned. Readers of all political perspectives will find this book valuable. It is a serious account of the economic history of the post-World War II era and provides thoughtful prescriptions on the way forward.”
—Dean Baker, Co-Director, Center for Economic and Policy Research

 

“Bruce Bartlett is something rare and admirable: a brave and intellectually honest man. He understands that the truth is rarely pure and never simple. An erstwhile protagonist of supply-side economics, supporter of Ronald Reagan and darling of the conservatives, he explains here why the economics of Keynes is, yet again, relevant and why the US will need extra tax revenue if it is to finance the rapidly growing burden of entitlement spending. Whether US conservatives like it or not, what the American people resolutely defend will have to be financed, . The answer, he argues, is a value added tax. He is right. Every serious analyst must know it.”
—Martin Wolf, Chief Economics Commentator, Financial Times 

 

“In this remarkable book Bruce Bartlett attempts two daunting, even heroic tasks.  The first is to persuade conservatives that John Maynard Keynes was actually one of them - a true conservative who saw that to manage the capitalist system was the price of protecting it, against the socialist challenge. The second is to persuade Republicans that their future lies with finally accepting the welfare state, financed, in keeping with supply- side principles, through a consumption tax. Bartlett here injects fresh thought into Reagan's legacy, and American politics will be much more civilized, and possibly also more competitive, if he succeeds.”
—James K. Galbraith, professor economics, University of Texas at Austin and author, The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too

 

“Bartlett offers the valuable perspective of a real inside witness . . . he is, moreover, a good economic historian and provides a well documented summary of the last 80 years of American macroeconomics.”
—The American Conservative

 

“Bartlett has had to concede the unpopular view that higher taxes will be inevitable, and makes the case that a value added tax (VAT), something like a national sales tax, may be the only way to generate the revenue that will be required to keep this ship afloat.”
—Booklist

 

“Do yourself a favor and read Bruce's new book. And know that Bruce is one of those conservatives who actually put principle over access to power. If you're a liberal looking for a real conservative to debate and read, you won't go far wrong with Bruce.”

—Andrew Sullivan, The Atlantic

 

“It is a significant work for any serious student of economics and perhaps the best general reference for anyone wanting a sober retrospective on the Keynesian phenomenon.”

—Library Journal

 

Praise for Wrong on Race: The Democratic Party's Buried Past:

 

“Bartlett's chronicle of the Democratic Party's sordid past…offer[s] illuminating evidence that, despite great marks of progress, race's stranglehold on the nation's collective conscious remains as strong as ever.”
—Washington Post Book World

 

Praise for Impostor: How George W. Bush Bankrupted America and Betrayed the American Legacy:

 

“It's a fairly devastating indictment of the current administration's economic policies from a conservative-to-libertarian perspective.”
—Chris Suellentrop, The Washington Post

“Liberal commentators gripe so frequently about the current administration that it's become easy to tune them out, but when Bartlett, a former member of the Reagan White House, says George W. Bush has betrayed the conservative movement, his conservative credentials command attention.”
—Publishers Weekly

Praise for Bruce Bartlett:

 

“Bruce Bartlett has long been one of Washington’s most searching, thoughtful, and uncompromisingly candid economic analysts.”
—E. J. Dionne Jr., author of Stand Up Fight Back and Why Americans Hate Politics

About the Author

Bruce Bartlett is an economic historian who has spent the last 30 years working in politics and public policy. He has served in numerous governmental positions, including as a domestic policy adviser to President Ronald Reagan and a treasury official under President George H.W. Bush. He is a weekly columnist for Forbes.com. and has written for The New York Times, Wall Street Journal,  National Review, Commentary, and Fortune. He is also a frequent guest on The NewsHour with Jim Lehrer, Lou Dobbs' Moneyline, NBC Nightly News, Nightline, Crossfire, Wall Street Week, CNN, CNBC, and Fox News Channel, among others.

 

Product Details

• Hardcover: 272 pages
• Publisher: Palgrave Macmillan; 1 edition (October 13, 2009)
• Language: English
• ISBN-10: 0230615872
• ISBN-13: 978-0230615878
• Product Dimensions: 6.4 x 1 x 9.6 inches
• Shipping Weight: 1 pounds (View shipping rates and policies)
• Average Customer Review: 3.7 out of 5 stars  See all reviews (11 customer reviews)
• Amazon Best Sellers Rank: #590,047 in Books (See Top 100 in Books)

More About the Author

Bruce Bartlett is a columnist for The Fiscal Times, an online newspaper covering public and personal finance, and Tax Notes, a weekly magazine for tax practitioners and policymakers. He also contributes a weekly post to the Economix blog at the New York Times, and writes regularly for the Financial Times. Bartlett was previously a columnist for Forbes magazine and Creators Syndicate. His writing often focuses on the intersection between politics and economics and attempts to inform politicians about economics, and economists about the current nature of politics.

Bartlett's work is informed by many years in government, including service on the staffs of Congressmen Ron Paul and Jack Kemp and Senator Roger Jepsen, as executive director of the Joint Economic Committee of Congress, senior policy analyst in the Reagan White House, and deputy assistant secretary for economic policy at the Treasury Department during the George H.W. Bush administration.

Bruce is the author of eight books including the New York Times best-seller, Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy (Doubleday, 2006). His last book was The New American Economy: The Failure of Reaganomics and a New Way Forward (Palgrave Macmillan, 2009). His new book, The Benefit and the Burden, will be published by Simon and Schuster in 2012 and is a history and review of issues related to tax reform.

Most Helpful Customer Reviews

60 of 67 people found the following review helpful

5.0 out of 5 stars How to Build a Better Conservative October 18, 2009

By Izaak VanGaalen

Format:Hardcover

It should be recalled that Bruce Bartlett was one of the primary advocates of supply-side economics in the late 70s and early 80s. In fact he was one of the main authors of the Kemp-Roth bill, which called for steep tax cuts in the top marginal income tax rates to spur economic growth. Ronald Reagan ran with this idea in 1980 and tax cuts were enacted into law a year later, thereby ushering in more than two decades of robust economic growth. In 1981 Bartlett wrote a book about this experience called Reaganomics: Supply Side Economics in Action.

In his new book, The New American Economy, he tells us that supply-side economics has outlived its usefulness, at least for now. In the late 70's we had high taxes and high demand which caused inflation; today we have relvatively low taxes and also low demand, which causes deflation. Supply-side economics no longer needs to be advocated, for it has already become part of everyone's way of thinking. Even the Obama Administration has its share of supply-siders. The stimulus package called for tax cuts for the vast majority and a small increase for the top percentile, still low historically.

According to Bartlett, Keynesian economics or fiscal policy is the best response to the current crisis. This is an apostasy to his conservative friends, where Keynesian is always a pejorative for a big government spending program. However, with interest rates at the bottom, it is obvious that government spending is the only way out of the current liquidity trap. If business and the consumer are not spending the government must. Not surpisingly, Bartlett was in favor of this year's stimulus package, not for its tax cuts, which he thought ineffective, but for its public spending component.

In the current book, the author has some sharp criticisms, in turn, for his conservative critics. He has previously explained on how conservatism has gone astray under Bush II in his book Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy. Here he reiterates that the notion that a tax cut can solve all problems is as ridiculus as it is damaging. A tax cut with a reduction in spending would have been welcome, but the starve-the-beast theory that has played out has led us to the financial precipice . This corrupt form of conservatism of the last 8 years has done such damage to our economy and federal budget that we have limited resources for the current crisis.

Ironically, the current crisis calls for further budget deficits as Bartlett has pointed out. But within this quagmire there is an opening for modern conservatism to emerge. Bartlett claims that he has not abandoned conservatism rather the so-called conservatives have. Conservatives should be dedicated to keeping government small and taxes low. For example, congressional Republicans should do more to shape the current healthcare debate by participating in it to keep costs down, rather than stand on the sidelines and attack any Demcratic attempt to cut, for example, Medicare or any other healthcare benefits. There is nothing conservative about this, it is pure partisan politics.

This book is the beginnings of a blueprint for building a better conservative or at least one that is relavant for today's crisis.

14 of 16 people found the following review helpful

4.0 out of 5 stars Apologies in advance for the long-winded review January 25, 2010

By Andrew Berschauer

Format:Hardcover

To say I was intrigued by a book subtitled "The Failure of Reaganomics" by one of its staunchest proponents is an understatement. I found an honesty in this writing I didn't expect, even if it comes across as somewhat self-serving at times.

Mr Bartlett starts out with a retrospective on the Great Depression and John Maynard Keynes. He confesses that he grew up professionally as a Keynes detractor, only to come around later in his career to realize that Keynes wasn't the one-dimensional figure he'd spoken out against - his policies had merit for their day, and his later writings calling for a return to fiscal conservatism, had gone largely unnoticed by Keynes' followers as well as detractors, including himself. Mr Bartlett does an admirable job of resurrecting Keynes as a conservative who sought only to save liberal democracy in the most expedient way. Here we get the most poignant lesson of the book.

The key theme in The New American Economy is that one size does not fit all. Mr Bartlett uses the person of Keynes as a teaching point. Keynes recommended a policy of government spending to lift the economy out of depression based on the need at the time, with the expectation that policy would change as the crisis du jour subsided; Keynes had no intention or expectation that policy makers would blindly apply one prescription to all ills. Through the rest of the book up to the concluding chapter, Mr Bartlett provides examples ad nauseum of the fact that blind prescription is what happened in fact. The parade of personalities and examples creates a muddle for the reader in the middle of the book, but the key themes are clear.

Mr Bartlett first outlines the "Keynesians" (who, he argues, bore little resemblance to what JM Keynes advocated); later he turns the pen on his own family - supply-siders in the 1970s who, like Keynes 40 years earlier, introduced a different approach more suitable to the crisis at hand. Following the success of Reaganomics (an ironic and self-serving assertion given the book's subtitle), supply-siders charted the same historical course as the "Keynesians" culiminating in Mr Bartlett's damning summary of GW Bush's performance as betraying the principles of conservatism and supply-side economics.

I'm unclear as to whether the final chapter is a contradiction of the rest of the book, or if it reinforces the key theme. Mr Bartlett abuses policy makers for their inability to contain spending, and advocates a Value-Added Tax as the next approach for the economic crisis we've borrowed ourselves into. He also beats the "save more, consume less" drum, which depends on an unlikely change in American behavior. The contradictions, of course, are with Keynes' advocacy of meaningful government spending (e.g., NOT tax rebates which are just saved - another contradiction?) and civic consumption to lift the economy out of recession/depression, and the fact that raising taxes in a recession is flat out bad policy. Perhaps, though, this is really saying no more than the 2008/2009/2010 economic crisis is different than - albeit similar to - the Great Depression, and requires a different approach. Mr Bartlett is not clear on this point.

The contradictions of the concluding chapter with the history lesson of the preceding pages left me feeling the book actually said nothing in its 200 pages. As a couple days have passed and I think back on the book, though, the key theme stands out more clearly, warning us of the dangers of turning economic policy into religion, even if the confusion and apparent contradiction of Mr Bartlett's "new way forward" hides it temporarily. "Religion" best describes my perception of today's political "dialog," and this cautionary tale is timely and welcome.

18 of 24 people found the following review helpful

4.0 out of 5 stars Another " Saul " (libertarian-Austrian ) transforms into "Paul "( J M Keynes ) February 1, 2010

By Michael Emmett Brady VINE™ VOICE

Format:Hardcover

This book is very similar to R A Posner's recent 2009 book in which Posner decided to sit down and read the General Theory (GT;1936)instead of accepting what various economists claimed Keynes meant.The author is a libertarian-Austrian economist, like Posner ,who decided to actually read what it was that Keynes said in the GT ,as well as in his pre- and post-GT work .The author discovers that,for example,

(a)Keynes was opposed to deficit finance and budget deficits ,in general.Keynes favored "deficits" only for the provision and maintenance of public infrastructure, such as transportation ,seaports,airports,dam -hydroelectric systems,aquifers,reservoirs,etc. All of these projects would pay for themselves in the long run.Constantly updating and modernizing such infrastructure would go a long way towards minimizing the problem of involuntary unemployment.
(b)Keynes was a lifelong opponent of inflation and inflationary finance.However,he never mistook reflation for inflation .
(c)Keynes was opposed to discretionary expansionary and contractionary fiscal(tax cuts) and monetary (open market operations) policies to fine tune the economy over the short run.These policies would simply add to the uncertainty of the future.
(d)Keynes was a follower of conservatives like Adam Smith and Edmund Burke.Burke was one of the first to recognize the systematic and comprehensive nature of Smith's Wealth of Nations(1776). Keynes's last published article ,in the Economic Journal of April,1946,correctly emphasizes the fundamental importance of Smith's entire conservative moral,economic,political,social,and legal system of thought.
(e)Keynes believed in policy rules.

However, all of these conclusions could have been arrived at in the mid-1940's by any economist and /or historian who was familiar with Keynes's published work.The reason why the author did not read the publicly available corpus of Keynes's work is because he was mislead by nonsense written about Keynes by Henry Hazlitt,Ludwig von Mises,Murray Rothbard,F von Hayek,The Freeman magazine,etc.The latest nonsense about Keynes has been published by Hunter Lewis.

I recommend this book.One can compare it with the great number of quotations deliberately taken out of context by Lewis. It should not come as any surprise that Lewis is an ardent libertarian -anarchist follower of Hazlitt,Rothbard,von Mises,etc.