It is time for me, as the Visiting Scholar of Conservative Policy at CU, to say farewell to one and all. The academic year has run its course, students have graduated or “risen” (as they used to say) up to another status of upperclassmen, and my appointment comes to its end. It has been a wonderful year, I am sure it is clear to everyone who has been involved, enjoyable and profitable. We have done very good things thanks to this position and the supporters all around on the faculty and administration and the wide network of donors—not to mention our energetic, talented, and winsome students.
At an outreach event this week in Carbondale, I had the great fortune to find Charles and Alice Parker in the audience. I had met Charlie before in the course of my duties as a historian of supply-side economics, because Charlie is one of the pivotal individuals in that history. Those who have read my book Econoclasts will recall the chapter on “Michael 1,” the restaurant in lower Manhattan where the first “supply-side” economists—those who recommended tax-rate cuts and a restoration of the soundness of the dollar against gold to cure the “stagflation” of the day—namely Robert Mundell and Arthur Laffer, met for drinks and dinner with the editor of the Wall Street Journal, Robert Bartley.
Bartley, like all Journal editors before him, was skeptical of tax-rate cuts until the deficit was more than wiped out, even if those tax rates went to 70%. Mundell and Laffer and another economist named Alan Reynolds worked Bartley over, he converted, and supply-side economics experienced a transformation in its status. It was no longer an intellectual parlor game played among University of Chicago economists, but on its way to being conveyed to the center of power. After Michael 1, the editorial page at the Journal (the largest circulation newspaper in the land) made the case for the “policy mix” of tax-rate cuts and a sound dollar relentlessly for the next five years. The fruit came in political practice in the Reagan Revolution of the 1980s.
Charlie Parker put together those dinners at Michael 1. He was with the investment firm H.C. Wainwright and had gotten to know Laffer circa 1970. He had had some experience with bringing academic economists into the Wainwright circle, to keep the firm clued in to good cutting-edge trends in economics. When he did this in the case of Laffer and Mundell, and corralling Bartley as well care of a connection with one of Bartley’s editorial writers, Jude Wanniski, it was not merely a stroke of genius. It was one of those events that must have seemed a little innocuous at the time but proved to be a juncture of history.
Personally, it was a great cap to my year to end it at an outreach event in the shadow of that prominent mountain Sopris in happy recollection with Charlie Parker. We weren’t taking any victory laps, unfortunately, in that our economy remains so substandard today, in large part, I do feel, and as I have striven to make plain all year, because the supply-side tradition has been forsaken. So we commit to more work in all good channels. Let me leave you with one more column I wrote about the logic of the supply-side policy mix of tax-rate cuts and a good dollar, namely that it should result in a negative income tax—that’s right, the government paying us. And after that, a link of the book I did so much at Colorado to complete, my and Larry Kudlow’s JFK and the Reagan Revolution: A Secret History of American Prosperity, which will come out this September 1. Farewell to all, and I look forward to keeping in touch and good friends.
For an article on negative tax rates, click here.
For the book on the JFK and Reagan tax cuts, click here.