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Conservatives deride Bruce Bartlett, a supply-side economics inventor, as a Keynesian for criticizing their devotion to tax cuts. But circumstances, not his views, have changed, he says—and Republicans should take note.
Three and a half years ago, I stuck my finger in the eye of the conservative movement—of which I considered myself to be part since I joined Young Americans for Freedom in 1969—by attacking George W. Bush for not being a real conservative in my book, Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy. Now I’ve done it again in my new book, The New American Economy: The Failure of Reaganomics and a New Way Forward.
Naïvely, I thought if I documented my argument thoroughly, stuck to economic issues, and cited many prominent conservatives, they would understand that Bush was leading the Republican Party down the path of certain defeat. If conservatives repudiated the president, I believed, the Republican Party had a chance of surviving the onslaught that would certainly hit in 2006 and 2008.
I really don’t understand why the Republican Party insists on a one-size-fits-all economic policy consisting of more and bigger tax cuts no matter what the economic circumstances are.
My advice was ignored. Instead, I was thrown under the bus. I was fired from my job at a conservative think tank, and the conservative media largely blacked out my book. My publicist was told that orders had come down from on high that it was to receive no mention at Fox News or any other Rupert Murdoch-owned media outlet. Whoever gave that order was very smart. Attacks in those forums, known for their slavish support for Bush, would have helped; ignoring the book was the worst thing they could do to me.
Among the arguments I made in Impostor was that Bush’s tax cuts had only the most superficial resemblance to those based on supply-side economics (SSE), despite repeated assurances from his administration that this was what they were based on.
The New American Economy: The Failure of Reaganomics and a New Way Forward. By Bruce Bartlett. 272 Pages. Palgrave Macmillan. $28. Well, I know a little about SSE. As a member of Rep. Jack Kemp’s staff in the 1970s, I was one of the people who invented it. (See my 1981 book, Reaganomics: Supply-Side Economics in Action, for details.) Among the ways Bush’s tax cuts violated SSE: They were heavily oriented toward tax rebates and refundable credits that were really just spending programs; the marginal tax rate reductions, which are the only tax cuts that are effective in stimulating growth according to SSE, were modest and phased in over a period of years; and all of Bush’s tax cuts expire next year even though supply-siders always said that only permanent tax changes affect incentives meaningfully.
I’m not here to argue with those who think SSE was hokum in the first place. But I agree with those who hold the view that Bush’s tax policies, whether based on SSE or the tooth fairy, demonstrably failed to build a solid foundation for economic growth. Not only did the Bush administration end with the second greatest economic crisis in American history, but even when its policies appeared to be working, they clearly weren’t doing much to stimulate the economy. Growth in employment, investment, and real GDP were all subpar during the Bush years, even if we disregard the collapse of 2008.
Back in 2007, I wrote an op-ed for The New York Times arguing that SSE should declare victory and then go out of business. Everything that was true about it had by then been fully incorporated into mainstream economic thinking, and all that was left was caricature. Continuing to maintain a separate identity for SSE only created unnecessary conflict with mainstream economists.
View as Single Page 12 Back to Top October 20, 2009 | 11:02pm Facebook | Twitter | | | Emails | print Nonfiction, Book Beast, Economics, Books, The New American Economy, Bruce Bartlett, Supply Side Economics, Jack Kemp, Stimulus Bill, George W Bush, Conservatives, Tax Cuts, Keynes, Republican Party (–) Show Replies Collapse Replies Sort Up Sort Down sort by date: periscope
"Supply Side Economics," was always a cruel hoax perpetrated by the Republican Party at the behest of their patron greedheads from the corporate boardrooms to the banks and Wall St. Tax cuts are not a panacea and tax cuts for the richest Americans has proven to be nothing but federal deficit generating folly. In the end, the middle-class and their children will wind up not only repaying for these unwarranted and destructive tax cuts, but they will pay trillions of $$$ in interest on these debts over the next two decades. The New Deal of FDR brought a middle-class into being that was far larger as a percentage of the population than ever before. The regulatory zeal of the New Dealers provided stability for the growth of the economy and everyone prospered. Since Americans have been sweet-talked into stripping away the New Deal by the Republican Party, they have seen their life's savings, their jobs and their right to healthcare all deteriorate or disappear. When do the people wake up and realize, we can no longer afford, nor are we obligated to subsidize the rich and greedy?
Flag It | Permalink | Reply 8:43 am, Oct 21, 2009 BaloneybusterThe people who have continuously perpetrated this myth are manipulative and deceitful. As they have been since the beginning of time. The people who enable it generation after generation - Republicans - are opportunists and ideologues. The people who vote for the enablers are stupid and easily led. They wouldn't know economics from a can of dog food. The point? This evil cabal should never be able to get near the levers of power again. Because if they do, they will give us yet another mess to clean up.
Flag It | Permalink | Reply | (–) Show Replies Collapse Replies 10:15 am, Oct 21, 2009 periscopeI believe the real purpose of the neverending Republican tax cuts (especially for the rich) is to destroy the federal government's ability to fund social programs, even those paid into like Social Security, by tens of millions of American workers. Republican administrations have borrowed all the money out of SS to pay for their tax cuts and their wars. In the end, the middle-class will be left with debt and despair, while the rich continue living their lives of extravagant waste. You're absolutely right about never allowing Republicans near the levers of power again, but are the American people smart enough to realize that?
Flag It | Permalink | Reply 10:28 am, Oct 21, 2009 CforchangeSuccessful small businesses endure because of their ability to adapt and respond. The government should run like a small business - it's common sense that strategy changes are necessary. Add term limits, a thorough audit and potential regulation of the derivatives market and we would be on our way up. With never ending representation along side investors primarily interested in their back room poker game, no matter the party, neither will care to put the middle class back to work. Bruce I'm glad someone in the GOP has acknowledged that the problem is lacking taxable employment.
Flag It | Permalink | Reply 11:57 am, Oct 21, 2009 gak001This article offers a lot of insight and it's very interesting, but supply-side economics still remains junk science.
Flag It | Permalink | Reply 1:41 pm, Oct 21, 2009 $('#c_total span').html('5'); $('#c_total').show();Thank you. As a first time user, your comment has been submitted for review. It can take anywhere from a few hours to a day or two for your comment to be reviewed, depending on the time of week and the volume of comments we receive.
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