This was explained at the beginning of the second movie. From the script I found online:
....
As the first movie showed, the Ghostbusters were a big fad. And like a lot of fads, they died out fast. This, combined with the massive property damage and the American tendency to build people up into heroes & bring them crashing down again, explains it pretty clearly to me. Pretty plausible, IMO.
The dialogue in the scene, condensing five-years worth of events into a few lines of dialogue, explains nothing other than a rough idea of
how the city turned on the Ghostbusters following the whole "giant marshmallow man and end of times" thing.
On the Occam's Razor front, sorry, I think you're wrong. It would take an extrordnairy amount of work, luck, and time for four men to put together a city-wide stunt of fooling people into thinking they're seeing ghosts. That so much set-up would be required by itself makes it far less "simple" and this is even assuming they live in "our world" where many people
already believe in ghosts and "ghost hunters." Then you factor in things that simply
cannot be explained away including the thousands of people who saw a
stories-tall marshmallow man walking down the street and those thousands of people who'd all say they never met the Ghostbusters, were drugged or anything. Then there's all of the other weird stuff that happened, bleeding walls at the precinct, skeletons driving cabs, ghosts in vendor carts, the red plasma balls flying around the city. Comparing that to "there's a such thing as the supernatural" and you say the former is
simpler? Sorry.
What you're pretty much saying is that a city-wide conspiracy to convict and jail OJ that'd include numerous people and levels of law enforcement and investigating is "simpler" than the fact he was an asshole who just snapped and killed his wife.
It's just not simple, possible
or reasonable to think the Ghostbusters were scam artists that somehow managed to fake 1000s of ghost sightings upto and including covering an entire city block in marshmallow that appeared out of nowhere. Yeah it was drugs... and mirrors.
Sorry. Nothing "simple" about the idea they could've fakes it at all. Not to mention they'd have countless scientific proof and could even get independant proof because, presumably, the evidence would easily be able to be seen and captured. I do admit it's possible the paranormal activity died down in the intervening time but that'd simply put them out of business, not discredit them. The property damage caused by their proton packs? That's what insurance is for.
Furthermore, going back to Peck, on
his front more proof would be required than "I think they're lying" especially when he's in the mayor's office and he pulls the "they use intoxicating chemicals and light shows" out of his ass.
The second movie makes no sense in terms of what happened in the events of the first. Really, they should've just had the second movie begin with the Ghostbusters suffering a drought in their business after five-years of work and consider cashing it all in and trying to find their way back into "normal life" before a big "event" happens that causes all of the activity to spike back up.
And no damn baby. That idea was just
stupid.