American Economic Policy in the 1980s.

• Author: McKenzie, Richard B.

Almost everyone in the 1990s seems to have a strong opinion about what happened in the 1980s. Most of the opinions inside and outside of academia have been shaped by vague remembrances and recent political rhetoric, and most are off base, to one degree or another. The 1980s were not nearly as dreadful from an economic perspective as the critics charge, and neither were they as prosperous as the supporters of Ronald Reagan would like to believe.

Martin Feldstein's collection of conference main essays by noted economists and discussion papers by well-known policy practitioners, American Economic Policies in the 1980s fills an extraordinary void in contemporary political discussions and history: the book substitutes fact for rhetoric. The writers provide a history of the multidimensional policy making process during that eventful decade, both in terms of what the Reagan administration sought to accomplish (and what it conceded) and in terms of what actually happened. The conference essays cover the policy spectrum, each written by a noted expert: monetary policy (Michael Mussa), tax policy (Don Fullerton), government expenditure policy (James Poterba), international trade policy (David Richardson), exchange rate policy (Jeffrey Frankel), regulatory policies (Paul Joskow, Roger Noll, Kip Viscusi, and Robert Litan), antitrust policy (Phillip Areeda), policy toward the aged (David Wise and Richard Woodbury), and even policies toward the debt of less-developed countries (Paul Krugman). The list of commentators includes Paul Volcker, James Tobin, Charles Walker, Russell Long, David Stockman, Charles Schultz, William Niskanen, William Baxter, Paula Stern, and Ruldoph Penner.

The names are listed simply as a short-hand way of describing the extent of the intellectual and practitioner power brought together in this one, albeit long, volume. It should go without saying that this volume is mandatory reading for anyone seriously interested in understanding and evaluating the 1980s. Many of the writers, not the least of whom were the editor, Martin Feldstein, and commentator and former Reagan budget director David Stockman, were inside the administration when many of the Reagan policies were formed or enacted. Feldstein's own personal reflective essay, which focuses on the deficit debate that emerged with force during his tenure as chair of the Council of Economic Advisors (1982-1984), is particularly valuable. Feldstein not only briefly summarizes some...