Cross-posted at Tall Tales
Newt Gingrich, who is reportedly angling to take over the RNC, does not mince words about the party he seeks to lead:
We need to be honest about the level of failure for the past eight years and why Republican government didn’t succeed.
Agreed. So let's be honest about the type of economic policies that led to our current situation.
Here's supply-side godfather, Arthur Laffer, in 2005:
George W. Bush could well turn out to be the best president in recent history.... Supply-side pro-growth economics couldn’t ask for a better champion—nor could any American.
Here's Lawrence Kudlow, the most prominent supply-sider on television, in early 2007:
The budget deficit has plunged while the economy has soared. Think of it as the Bush Boom—think of it as another ‘W’ in the win column for supply-side economics ....
And here's President Bush himself, in late 2007:
I’m a supply-sider.
The cause of the failure is crystal clear, and Newt has now seen his supply-side assumptions proven wrong in both directions:
First -- as detailed by Paul Krugman in his 1996 article, Supply-Side Virus Strikes Again -- Newt Gingrich and his supply-side allies confidently predicted a severe recession as a result of Clinton's 1993 tax increase for the rich. The actual result, Krugman noted, was precisely the opposite:
Well here we are, three years later: The economy has created 10 million new jobs, the market is up by 1500 points, and the deficit has been cut in half. I'm not saying that Clinton's policies led to that result--they account for only part of the good news about the deficit, and hardly any of the rest. But the point is that the supply-siders were absolutely sure that his policies would produce disaster--and indeed, if their doctrine had any truth to it, they would have.
Second -- as painfully revealed over the past few months -- the wholesale implementation of supply-side economics under Bush has resulted in the greatest economic crisis since that caused by the supply-side economics of Calvin Coolidge, Andrew Mellon and Herbert Hoover.
So where does that unequivocal failure of supply-side economics leave Gingrich?
As of last year, his three-point plan for "a long economic boom and enduring prosperity" consisted of:
- More Supply-Side Tax Cuts (because they "create new jobs," "expand[] savings," and produce "higher wages");
- Privatization of Social Security (because "market investment returns are so much higher than what Social Security promises"); and
- Accelerating the Coming Breakthroughs in Science and Technology
Using Newt's "honest" approach to acknowledging "failure," it's now clear the assumptions underlying the first two points of his proposed agenda have failed.
So that leaves investment in Science and Technology.
Hey, not a bad agenda.
Newt for RNC Chair!
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Laffer, Kudlow and Bush Quotes Collected in Yeah, Right pages 51 & 63
Online Sources: Laffer; Kudlow; Bush