The Reindustrialization of America
The broad outlines of this paper were conceived at a time when David Stockman seemed to believe in Reaganomics, and when Wall Street's political enthusiasm for the Reagan "revitalization" program masked its rational expectation that the program would fail. So-called "supply-side" economics was embraced at the highest levels of government, and those who called it "voodoo" had been co-opted or silenced. I proposed then to contrast an institutionalist view of reindustrialization or revitalization with this fashionable vision in a paper to be called: "Reindustrialization: Industrial Evolution or Pecuniary Revival?" Now we know from inside the Trojan horse just how fickle the fashions in economics can be, and what the great "supply-side" tax cut of 1981 was really all about. As the principal architect and publicist of Reagan's revitalization confided in his remarkable interview with William Greider in the Atlantic, "supply-side" was to the initiated merely a code word for old-fashioned "trickle-down."' The deception worked, as they say, like a charm. We have set in motion a regressive redistribution of personal tax burdens, and we are committed to the virtual elimination of the corporate income tax through a huge but inestimable grant of marketable rights in business tax expenditures. Our steel industry-or at least the largest steel company-may yet save itself by drilling for oil, largely at public expense, on the floor of the New York Stock Exchange.