Scott Sumner says: "I used to hate older guys that told me I just didn’t understand how things were in the old days. Now I’ve turned into that jerk."

In the 1950s, Eisenhower presided over 90% income tax rates. Until the late 1970s the US government set prices in many industries. . .

Samuelson’s textbook once predicted the Soviet living standards would surpass the US by 1990. If true, shouldn’t we adopt a democratic form of socialism in America?

We’ve come a long way. Right-wingers should not get too discouraged about the regulatory “reforms” being considered. Of course the crackdown on derivatives will probably do more harm than good, but the key point is that the harm it does will be trivial compared to the harm done by policies in the 1970s that even conservatives bought into.

The reason everything changed after the mid-1970s is that most economies hit a brick wall around 1974. And it wasn’t just the oil shock; most economies downshifted permanently into a much lower real GDP growth rate. Italy went from around 7-8% growth to around 2-3% growth. The more statist economies were often the ones that suffered the most. This is important keep in mind, as those who aren’t old enough to remember this period might draw misleading conclusions from time series data. . .

The 1970s were the turning point in modern history. Statism was exposed as a flawed economic system. The more idealistic countries like Denmark and New Zealand reformed most rapidly when new information showed that markets worked better than government.

I find the argument that since we all sort of bought into statism until it crashed in the 1970s that we shouldn't be too upset about about the comparatively slight return to statism now in progress in the US to be highly flawed. We should oppose it since we know that it's a bad idea. The Pythonesque notion that "it's only a flesh wound" is comic. We should remember how we slid into that sad state back in the day. It started with flesh wounds too.