Another in my series about refuting the myth that Ronald Reagan, financial liberalization, or both ushered in an age of much faster economic growth.

Just to be clear: when I show that growth by every measure has been slower since 1980 than before, I’m not claiming that this shows that Reagan/finance caused the slowdown. The upper hand, in this case, is actually on the other foot: it’s the Reagan/finance enthusiasts who use the alleged fact of faster growth to make their case, so I’m just showing that it never happened.

What’s funny — almost touching, really — is the way the enthusiasts respond to each refutation by claiming that there must be another number which justifies their triumphalism. Real GDP grew faster! No? OK, real GDP per capita grew faster! No? Well, productivity grew faster!

Actually, no. Productivity data here (zip file). Labor productivity rose an average of 2.3% per year from 1950 to 1980, 2.0% from 1980 to 2007.

But there’s more to the story. Postwar productivity growth had three eras: a period of rapid growth from the late 40s to the early 70s, then a big slowdown that lasted until the mid 90s, then an acceleration that continues to this day.

And here’s what the Reaganauts have done: in addition to doing a disappearing act on the growth during the postwar generation, they’ve retroactively attributed the post-95 productivity surge to Reagan. Because, you see, a surge that began midway through Bill Clinton’s administration was obviously caused by Reagan’s 1981 tax cut.Oh, and never mind the almost universal prediction on the right that the 1993 tax increase would lead to economic disaster.

Why did productivity stagnate for 20 years, then revive? The truth is that it probably had very little to do with anyone’s economic policies; the best guess is that businesses spent two decades figuring out what to do with information technology, then found the answer: big box stores! But that’s a subject for another post.