Newspaper article The Christian Science Monitor

Economist Says 1980s Weren't So Terrible

Newspaper article The Christian Science Monitor

Economist Says 1980s Weren't So Terrible

Article excerpt

ECONOMIST Richard McKenzie acknowledges that statistics lately have begun to blur in his mind. That's because he's just finished writing the text for a book about the economy in the 1980s - the Reagan era - 400 pages heavy with numbers about growth in output, income distribution, and so on.

The professor at the University of California, Irvine, came to this general conclusion: "The 1980s was a more prosperous decade than people generally give it credit for."

Such a conclusion may delight Republicans in the current election atmosphere. But Professor McKenzie says he's neither Republican nor Democrat, contributes money to neither party, and hasn't even decided which presidential candidate he will vote for in November. In other words, he claims to be striving for nonpartisan analysis. Since many of his numbers end in 1989, they may not be too relevant to the Bush presidency, with its problems of a recession and subsequent slow growth.

Nonetheless, some of his findings are notable:

* National output after inflation grew by nearly a third in the 1980s. That's the equivalent of the entire output of the German economy or two-thirds that of the Japanese economy.

* Real manufacturing output rose 38 percent. The number of manufacturing jobs declined 1.2 million. But that drop is because productivity rose around 4 percent a year and because many firms "outplaced" some jobs, such as truck-driving, to firms in the service sector.

* United States output relative to that of the remainder of the world was about the same in 1989 as in 1980 - 34 percent. That share did decline for much of the postwar world, but not in the 1980s.

* The rich got richer, but so did the poor and the middle class in the 1980s.

On this last point McKenzie is getting into the area of distribution of income, where the statistics can get really complex. Conclusions may vary according to factors selected by the analyst: individual or household income, hourly wages or total income, the time frame, adjustment for family size, and so on.

McKenzie, in a Washington University study, uses two federal surveys of "consuming units" done in 1984 and 1989, in which the people were asked about both income and spending, including a diary of expenditures. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.