Matthew Yglesias writes:
The Relevance of Supply-Siders: One of the points that Jon Chait's book, The Big Con makes is that the central element of the Republican Party's tax policy -- lower taxes rates will lead to higher tax revenues -- is a discredited crackpot notion. Megan McArdle takes on the interesting task of denying that this is, in fact, an influential idea:
His primary exhibits for the nefarious influence of supply-side policy are: Larry Lindsay, Dick Cheney, Jack Kemp, Jude Wanniski, and George Gilder. Cheney I give you, but Larry Lindsay was drummed out of the administration in disgrace (for unrelated reasons) even before Bush's major tax cut, and Chait somehow neglects to mention the more conventional economists who have occupied the job since. Jack Kemp hasn't had access to serious power since I was snoring my way through Algebra I, and what power he did have was over HUD. Moreover, though I agree that Jude Wanniski and George Gilder are barking moonbats, they have, to put it kindly, limited influence on today's Republican party; which is hardly surprising given that Wanniski was kicked out of the party in disgrace before he died in 2005, and George Gilder has turned his attentions to that hugely influention Republican mouthpiece, the Gilder Technology report. This motley collection of names is hardly proof that the Supply Siders Have Taken Over the Building.
Chait's point, however, was that the very same ideas espoused by these crazy people continue to control the GOP policy agenda. To get around this point, Megan seems to elide the small fact that Dick Cheney is Vice President of the United States. One other believer who has some impact on public policy is a fellow by the name of George W. Bush:
You cut taxes and the tax revenues increase. See, some people are going to say, well, you cut taxes, you're going to have less revenue. No, that's not what happened.
The ranks of the supply-siders also include prominent syndicate columnist Robert Novak who also reminds us that Tony Snow is "an ardent supply-sider as a columnist and commentator." There's also these guys:
Likewise, the Washington Post reported that “on February 8, press secretary Ari Fleischer said the [new tax] plan would pay for itself.” In the same vein, Congress Daily reported on January 8 that House Majority Leader Tom Delay, referring to the “growth” package, “told reporters that the long-term revenues generated by tax relief would more than cover the price tag of the cuts.” Congress Daily also reported that Senator John Sununu (R- NH) stated “that the tax cuts would actually bring long-term deficits down.
And, of course, in addition to this insignificant crew of presidents and congressional leaders, there's people like Rudy Giuliani and John McCain. As Greg Mankiw put it "fealty to the most extreme supply-side views is de rigeur in some segments of the Republican party." Those segments just happen to include the party's entire national leadership.
Along with having all of the politicians endorse this view, these "segments" of the Republican Party have also created a parallel intellectual infrastructure, so that we have Heritage Foundation stuff endorsing this and AEI fellows writing articles called "Art Laffer, Righter than Ever" for National Review. And, of course, there's The Weekly Standard and The Wall Street Journal editorial page and Larry Kudlow's television show.
Now maybe Megan's point is that neither the leading conservative weekly magazine nor the leading conservative biweekly magazine nor the leading conservative opinion daily nor the country's leading conservative politicians nor the country's leading conservative think tanks actually believe what they're all saying about taxes. Probably at least some of them don't. I think Jon's basic point doesn't really hinge on the sincerity politicians may or may not have in espousing nutty views. The point is that the views are widely espoused, and a central part of the contemporary right's political agenda of upward wealth redistribution.
In email, Mark Thoma asks how is it that Matthew Yglesias can possibly post so much high quality stuff. I think the answer is that it is his job, after all--or at least I think it is his job.