Monday, November 05, 2007

Laffer's Supply-Side Counter-Offensive

Supply-side founder and mentor Art Laffer is mounting a terrific counter-offensive to the supply-side attack coming from The New Republic’s Jonathan Chait and The New Yorker’s James Surowiecki. In a recent piece entitled, The Onslaught From the Left, Part I: Fact Versus Fiction*, Art makes three summary points:

• This paper serves as a response to a recent The New Republic article by Jonathan Chait which criticizes the supply-side economics movement and lays out the typical redistributionist’s case for raising taxes on the rich.

• While the article refers to supply siders as “wingnuts,” the tenets of supply-side economics—low taxes, sound money, free trade, reduced regulations, etc.—have been adopted (successfully, I might add) in the U.S. and across the globe.

• The best way to help the poor is not to make the rich poorer, but to make the poor richer. All Americans as a whole have gotten richer as a result of pro-growth supply-side policies. The economic and social gains of the past 25 years—across class, race and gender lines—speak for themselves. The irony is that many of the policies promoted by the Left would hurt the very classes of people whom the Left professes to champion.

On Kudlow & Company Friday night, Art brilliantly defended supply-side economics in a face-to-face discussion with Mr. Surowiecki. By the way, James Surowiecki is usually quite reasonable, particularly his writings on the wisdom of markets. And he acknowledged the supply-side incentive effects that spur growth from lower marginal tax rates.

*If you would like to read Art’s paper in its entirety, please click here for the PDF version.