Letter: History has economic lesson to teach us

Thursday, March 22, 2001 | 8:59 a.m.

"Those who fail to learn from history are doomed to repeat it." Not many people seem to believe that today, not even Alan Greenspan.

Ronald Reagan gave us "tickle-down economics," what George W.'s father called "voodoo economics." In this theory giving people with money more money will cause them to either spend more money or invest more money and get the economy out of its slump. Instead we got a larger slump, massive deficit spending and S&L failures.

There are three ways people can use their tax rebates. They can either spend it, invest it or put it in S&Ls. If they had confidence in the economy they would either spend it or invest it, but confidence in the economy was the cause of the slump in the first place. Because the S&Ls have to pay interest, putting the money in S&Ls would result in the S&Ls putting the money in dubious investments during an economic slump, causing S&L failures and government bailouts.

What we need to get out of this economic slump is not "trickle down," but "bubble up." The role of the government is to force money down to the bottom of society so it can bubble up again.

MARTIN S. LEVIN