"Of course Greenspan and monetary policy play a role in economic prosperity, but I do not believe that Greenspan is some how more uniquely smart nor solicitious of Clinton than Volcker was of Reagan in the 1980s, yet lower-income folks were royally screwed in the 1980s and have seen some real gains in the 1990s. So what explains the difference in how the respective booms affected economic inequality and the wage gains of lower-income folks?"
mbs: There is no comparison between the '80s recovery and that of the 90's. Investment crashed in the 80's, and growth was not nearly as rapid, especially compared to the past two years.
NN: In the 1990s, taxes on the wealthy were increased and programs like the
mbs: Increased in 1992, decreased in 1997.
NN: . . . EITC, infrastructure spending and other transfers were increased in more lower-income areas. Labor policies supported affirmative action, unions and
mbs: Nathan has NO evidence of infrastructure spending or much else, other than EITC, increasing in lower-income areas. There's no data on this.
NN: high-wage federal contracting rules. Not to the extent we would like, but it hardly seems unreasonable to say that Greenspan was not visibly dedicated to policies of cutting economic inequality compared to Volcker, so the other changed variable - the shift from GOP Presidency to Clinton - might be a more reasonable variable to explain the difference.
mbs: Since NN starts from very few variables, using a process of elimination is not very informative in explaining the 90's boom.
The critique of the "cult" of Greenspan is an effort to deny the sway of the undemocratic Fed over our elected and semi-elected representatives, about which there should be little doubt. Woodward is a bit of a dope on economic matters, but Bill Greider is not. Interested parties should consult his book on the Fed. Even DeLong acknowledges the supremacy of the Fed over the Fisc.
Nathan says people elevate the Fed because they hate Clinton, meaning their analysis is an artifact of their politics. But it is Nathan who merrily tosses out unsubstantiated assertions, left and right, in order to defend Clinton and his own pragmatic choices. And when he's called on it, he invents some statement you have not made and tries to debunk it.
mbs