The Ecphorizer

New Sect of Economics Announced
Barry Leff

Issue #12 (August 1982)

[quoteright]A spokesperson for Ronald Reagan announced that the much rumoured new economic sect, Reaganomics, is finally opening some churches in Washington, DC and New York. The new sect, which combines adoration of Ronald Reagan with a belief in Economics, is expected to achieve a high

R. Reagan...was meditating on a macroeconomic monetarist mantra.

degree of popularity among the more conservative elements of the population.

According to apostle D. Regun (who is also Secretary of the Treasury), the new sect offers many advantages over the older sects.

"The existing economic sects, Keynesian and Monetarist, both have serious shortcomings. The Keynesians believe in a strong, interventionist government role, which provides us with the leeway to stimulate demand by building new weapons. On the other hand, the Keynesian approach is somewhat contrary to our nation's ideals of 'rugged individualism.' The monetarist gambit, which is quite attractive to our sense of freedom, requires government to restrain deficit spending, which will not allow us to build as many nuclear weapons as we would like. We in Reaganomics are acknowledging that what the American people want is individual freedom, enough nuclear arms to show the world that we can't be pushed around, and a 10% a year growth in the economy with no inflation. Since the prevailing belief systems of Keynesians and Monetarist do not allow for this important American set of beliefs, we have taken it upon ourselves to formulate a new sect, meeting the requirements of contemporary America."

High Priest Regun then revealed the metaphysical justification for Reagonomics, stating that everything can be explained in terms of shifting IS and LM curves bringing about adjustments in the Short Run Phillips Curve that can result in shifting the Natural Level of the GNP in a desired direction while maintaining low inflation levels. Reaganomics maintains that a strong stimulus to overall Demand Growth can be developed into Real GNP by control of the money supply. Shifting expectations and bolstered confidence then result in the Demand Growth being absorbed not as mere Real GNP growth, but as a component of Natural Real GNP, leaving adjusted nominal demand growth a low number that will not have a destabilizing effect on the equilibrium. The key concept is an eclectic blending of the best concepts of Keynesian and Monetarist beliefs. A belief in Santa Claus is reinstated as well.

Regun dismissed critics' claims that the hypothesis of adaptive expectations forecasts 15 years of recession and high inflation before Reagonomics attains its economic nirvana as "specious grumbling from abstract theoreticians who have no faith. Besides, there ain't no such thing as a free lunch."

The sect's charismatic leader and founder, R. Reagan, was unavailable for comment. He was meditating on a macroeconomic monetarist mantra. 

Barry Leff has moved down from the Santa Cruz mountains to bring his gospel to the lowlanders.  His guru in spiritual economics was the late Shah of Iran.

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