Steve Conover: How Democrats—and the Tea Party—Get Reagan Wrong

Steve Conover retired recently from a 35-year career in corporate America. He has a BS in engineering, an MBA in finance, and a PhD in political economy.

To get our ailing economy back on track, we’ve been applying the Keynesian fiscal-stimulus formula for three years now (also known as “government knows best” or “intelligent design” economics). The 2008 Bush program of rebate checks ($170 billion) was the first design for stimulating demand. The next attempt was not the $700 billion Troubled Asset Relief Program (signed by Bush in October 2008, mostly paid back by now); it was the subsequent $787 billion Recovery Act of 2009—consisting mostly of short-term, one-time stimuli, like jolts from Keynesian-brand defibrillation paddles.

How’s all that stimulus working out for us? Not too well, so far. Creationism economics—driven by government experts’ decisions as to which companies should survive or perish, which investors should be saved or go broke, and which technologies should win or lose—isn’t delivering on its promise. Should we try another jobs bill with more of the same remedies, continuing to have faith that intelligent design economics will eventually work?

It’s easy to imagine Ronald Reagan shaking his head at all of this; but it’s more difficult to know whether he would be smiling at us, or frowning.

It’s time to step back, take a deep breath, set our ideological talking points aside for the moment, and take an honest look at what happened in the 1980s. A good starting point is the following excerpt from Reagan’s farewell address to the nation, which he delivered from the Oval Office more than 20 years ago...