How I Won The War

By John Greenwald

TITLE: THE SEVEN FAT YEARS

AUTHOR: ROBERT L. BARTLEY

PUBLISHER: FREE PRESS; 347 PAGES; $22.95

THE BOTTOM LINE: A paean to Reaganomics that glosses over the excesses and inequities of the Reagan era.

IF THE 1980S WERE THE WORST OF times for critics of that debt-propelled decade, they were the best of times for Wall Street Journal editor Robert Bartley. From his pulpit at the head of the Journal's editorial page, Bartley preached the gospel of tax cuts and deregulation that became known as Reaganomics and hurled anathemas at heretics who argued that the government had a positive role to play in the U.S. economy. While Bartley's polemics sometimes clashed with facts reported in the Journal's news columns, which were full of tales of greed and corruption in the executive suite, they provided comfort to many of the paper's conservative readers.

In The Seven Fat Years, Bartley calls for a return to the policies that, he says, made the '80s a glorious epoch. Packed with statistics and sometimes eye-glazing arguments, the book tells how Bartley and such fellow supply- siders as economist Arthur Laffer and journalist Jude Wanniski cooked up the recipe for Reaganomics over meals at a Wall Street watering hole called Michael 1. The basic ingredients were tax cuts and a monetary policy capable of producing low and stable interest rates. "As 1982 drew to a merciful close," Bartley writes, "both sides of the Michael 1 prescription were finally coming into place. The Seven Fat Years began in November."

What those wondrous years wrought, as Bartley tells it, was the unprecedented creation of 18 million new jobs and a rekindling of the American spirit. The decade saw unfettered entrepreneurs create a revolution in communication that turned personal computers, fax machines and cable TV into home and office staples. At the same time, venture capital boomed and new stock and bond offerings blossomed. Bartley even applauds changes that took place in America's eating habits. "Frozen yogurt became a diet staple," he enthuses, "with estimated sales increasing 300% between 1986 and 1990.

The problem with this panegyric is all the lumpy and inconvenient facts, such as the crumbling U.S. infrastructure and the declining competitiveness of American corporations, that Bartley tries to dismiss. Did the budget deficit swell menacingly in the '80s, for example? No problem! Japan and Germany had lots of red ink too, and "advanced" economists doubt that deficits even matter. Did the plight of the poor worsen? Not really, Bartley argues. The data for low-income households overstate the extent of poverty by counting many retired people -- who often own their own homes and have plenty of capital -- along with college students who get aid from their parents.

Yet Bartley applies no such reductive reasoning to the numbers that buttress his arguments. He takes the explosion of new jobs at face value, for example, without pointing out that many paid so little that only the growth of two- income households kept the average family's inflation-adjusted earnings from falling behind.

Bartley's main error is his narrow focus on a few pet theories and prescriptions and the inevitable special pleading this entails. "The moral of the Seven Fat Years is that economic growth counts," he writes. But the rising tide of '80s-style growth failed to lift all boats as advertised: the rich got bigger yachts, the middle class foundered, and many of the poor went under. The task for the 1990s will be to move beyond the excesses and inequities of the debt decade rather than strive to return to a Golden Age that never existed.