The Reagan years were, indeed, awesome

MSNBC liberal talk show host Rachel Maddow likes the word “awesome.”  On HBO’s Real Time with Bill Mahr, Maddow teamed up with Pres. Reagan’s former budget director David Stockman and poured a bucket-full of bunk about Reagan’s economic record.  Wall Street Journal editorial board member and senior economics writer Steve Moore ably and adroitly defended Reagan’s economic success.

MADDOW: “The top 1% of of the country’s income went up roughly 80%.  The bottom part of the country went down.”

FALSE:  Between 1981 and 1989 (Reagan years), the poorest 20% of Americans saw their real family incomes rise 6%, the next quintile rose 8%, the 3rd quintile rose 10%, the 4th quintile rose 15%, and the richest 20% saw their real family incomes rise 20%.

By contrast, in the years preceding Reagan (1973 – 1981), the poorest saw their incomes DROP 5% and the next quintile saw a decline in real incomes by 2%.  The poor got richer under Reagan.

MADDOW: “From 1980 – 1990, the richest 1% saw their incomes go up 80%.  The median wage in the country over 10 years went up 3%.”

FALSE: Between 1981 and 1989, real median household income rose 11%, from $37,000 to $41,000 (Census Bureau, 2008 Statistical Abstract of the United States, Tables 670 and 671).

MADDOW:  “So if you were rich, Reagan was awesome!  And if you were anybody else it sucked.”

TRUE AND FALSE:  If you were rich, the Reagan years were awesome.  If you were anybody else, it was awesome for you, too.  Why?

  • From 1981 to 1989, the U.S. economy produced 17 million new jobs, or roughly 2 million jobs each year.  In the 1990s, another 26 million jobs were added.
  • The poorest 20 percent of Americans experienced a 6 percent gain in real income in the 1980s after suffering a 5 percent decline in the 1970s.
  • Black Americans saw their incomes grow at a slightly faster pace (11 percent) than whites (9.8 percent) in the Reagan years.
  • By 1989 there were 5.9 milion more Americans whose salaries exceeded $50,000 a year than there were in 1981 (adjusting for inflation).
  • There were 2.5 million more Americans earning more than $75,000 a year, an 83 percent increase.
  • The number of Americans earning less than $10,000 a year fell by 3.4 million workers.
  • The stock market more than tripled to 3,000 (!) by the end of the Reagan years.
  • The percentage of all workers who owned stock rose from 16% of all workers in 1980 to 26% by the end of Reagan’s term.

Yes, the deficit exploded.  But it’s tough to blame the deficit on Reagan’s tax cuts since real federal revenues grew by 24 percent.  No, spending was the real culprit.  The cumulative increase in defense spending from 1981 to 1989 ($806 billion) was larger than the entire cumulative increase in the budget deficit ($779 billion) in those years.

Finally, when given the opportunity to concede Moore’s points about the strength of the economy during the 1980s, Stockman unfortunately only talked about the deficit.

Here’s the clip.