American Economic Policy in the 1980s.

• Author: Biederman, Daniel K.

A comprehensive account of American economic policy over any decade in the modern era would necessarily constitute a lengthy book. Considering that the decade in question is the 1980s and that this book neglects few, if any, important policy areas, it is remarkable that it did not end up as a much lengthier volume. Indeed, a great deal of content is packed into these pages.

Martin Feldstein organized a National Bureau of Economic Research conference "to improve our understanding of how and why economic policy developed as it did in the 1980s and to create an authoritative record that others who study this period will want to consult" [p. ix].(1) Feldstein succeeded in creating just such a record, one that is scholarly and, at the same time, entertaining, at least to anyone with an interest in the political economy of the 1980s.

Some members of the over-35 crowd may surmise that even the early 1980s represent "recent" history and that memories are sufficiently long that little would be gained from reading a book such as this one. For many potential readers, this preconception would be wrong for at least two reasons. First, for those of us who do not read, write, and think about political economy on a full-time basis, memories of important policymaking events may fade faster than we would like to think. How many of us recall, for example, that the Reagan administration's original version of the 1981 tax-cut package did not provide for indexation of individual income-tax brackets, and that the administration's eventual acceptance of indexation was somewhat reluctant? How many of us recall exactly how important the 1985 job switch involving James Baker and Donald Reagan was for the formulation of administration policy toward exchange rates and the trade deficit?

Second, memories and perceptions of 1980s policies have been obscured by our exposure to the often-slanted views of certain ideological politicians and media-types. To be sure, some of the contributors to Feldstein's book, as well, have an interest in putting their own "spin" on the policies of the 1980s, and the reader encounters the occasional hyperbole.(2) To a great degree, though, the contributors eschewed political rhetoric in favor of thoughtful reasoning. The book's status as an "authoritative record" is more credible as a result.

The book consists of 13 chapters. In the first chapter, Feldstein offers a "personal view" of 1980s policymaking, emphasizing monetary, fiscal, and...