Great Leap Forward

The Myth of the Great Moderation: Keynes vs Greenspan

About as good as it gets:

Haiku Charlatan has done it again with another excellent video that contrasts Greenspan’s era of the “great moderation” against the “Keynesian” golden age of capitalism. Yes, you can quibble about exactly how “Keynesian” that period from WWII until 1970 really was. I was there, and there was a lot wrong with our economy and our society. But you cannot quibble about the destruction of our society and economy at the hands of the NeoLibs, NeoCons, and Regressives–the period since the early 1970s has been an unmitigated disaster for most Americans.

4 Responses to “The Myth of the Great Moderation: Keynes vs Greenspan”

The ArthurianMay 10th, 2014 at 7:35 am

(I was there, too.)

Greenspan took over in 1987.

I looked into this. Bill Mitchell writes of "the early 1980s (as the neo-liberal onslaught began in earnest)." PeterC at Heteconomist writes of "the neoliberal attack on workers' pay and conditions from the early 1980s onwards"

Q: LRW, how do you get to "the early 1970s" ?

L. Randall Wray L. Randall WrayMay 10th, 2014 at 11:25 pm

Art: correction. Greenspan took over helm of Ford’s CEA in 1974. Working folks’ income stopped increasing in 1974. I think not a sheer coincidence. And before Ford there was Tricky Dick. The reaction against “Keynesian” economics began in the late 1960s; the regressives regrouped and began to dismantle the whole deal. When the first oil price shock hit, they reacted with austeriety rather than with energy conservation. Same thing in the second oil price shock. And Volcker went Volcker on the economy. And we got Reagan and some Bushes and a Clinton or two. It has been an unmitigated disaster.

The ArthurianMay 11th, 2014 at 1:57 am

Oh, the council of economic advisers. Thank you. That one must have slipped thru a crack in my brain.

But if not a sheer coincidence, then what? Was some policy passed at that time, that caused income to stop increasing? If so, it didn't do much to "whip" inflation until after Volcker went Volcker.