https://www.wsj.com/articles/party-like-its-1983-11591560625
“In the grip of the world-wide recession, we must all stick to anti-inflationary, high-productivity policies that adapt new technology, retrain workers, and increase efficiency.” Who said that? Donald Trump? Angela Merkel? Emmanuel Macron? Nope, that was Ronald Reagan in May 1983, speaking on the eve of the Williamsburg Economic Summit of Industrialized Nations.
Now, the off-again, on-again Group of Seven meeting scheduled for June is off until September at the earliest. Too bad. It’s needed more than ever. I spoke with Larry Kudlow, director of the White House National Economic Council and the so-called Sherpa of the meeting’s agenda, and asked what his pitch will be. “It’s the Reagan playbook,” he says. “In some sense, it’s very easy. The same principles apply. You want to reduce tax rates, generate incentives, reignite the animal spirits, and deregulate to remove business obstacles.”
Without Reagan’s principles, the capital investment and innovation since 1983 might still have happened, just more slowly. We’d be getting that original iPhone right about now, delaying improvements in everyone’s living standards. Wait, no Uber?
More than 42 million Americans have filed jobless claims since mid-March, and around 21 million are now unemployed. We need jobs, badly. After the first wave of rehiring, Mr. Kudlow insists, “you must reignite growth—you must. Your car battery is dead because you haven’t used it in three months, so you have to pull out the jumper cables and reignite the battery, which is what we are trying to do with the economy.”
In 1983, the U.S. economy had just gone through the ravages of Paul Volcker’s inflation-slaying recessions. Now it’s zero inflation and lockdowns. Do we need another giant stimulus package? Mr. Kudlow thinks not: “The first tranche was rescue, cash, liquidity, survival. Now we’re transitioning through the reopening, and the third leg has got to be growth incentives. That’s been my mantra internally, and we’re going to press that at the G-7.” He prefers a payroll-tax holiday and capital-gains exclusions for investments through the end of the year.
