“If space aliens were to land a flying saucer on the Capitol’s South Lawn, one question they might ask is: Wherever did you get the idea that cutting taxes would increase revenue?”
As Ronald Reagan might say, there he goes again.
The space alien question comes at the very opening of Timothy Noah’s New York Times book review of Jack Kemp: The Bleeding-Heart Conservative Who Changed America by Morton Kondracke and Fred Barnes.
It is necessary here to do the requisite full disclosure that I worked both for Reagan in the White House and Kemp at HUD. Which means, of course, that I have… um…. a slightly different view of Kemp, and hence this book, than Noah. In fact, Mr. Noah covered Jack Kemp at HUD, where he was described as follows by Jack’s HUD Deputy Al DelliBovi: “When Noah covered Secretary Kemp for the Wall Street Journal he always had a chip on his shoulder and rarely missed an opportunity to be snarky.” Having moved on to Politico, clearly Noah has never lost his snark, not to mention his liberal’s obsession with tax-and-spend crony economics that has proved to be — over and over and over and over again — an abysmal failure.
The review is a sterling example of just how far left the left has gone that it roundly rejects the central truth of Reaganomics as was stated by John F. Kennedy, the latter accurately saying — as Kemp would always remind — that “It is a paradoxical truth that tax rates are too high and tax revenues are too low. And the soundest way to raise revenues in the long run is to cut taxes now.”
This is also known as classical economics, and the obvious answer to Noah is that the more people working the more tax revenue is gained. Co-author Kondracke has graciously provided a lengthy rebuttal to Noah’s review and sent it to those of us on the still-very active Kemp mailing list. (Yes, we Reagan and Kemp people have a network. Gasp!) It has also been posted in full at Ricochet and linked at Real Clear Politics here. Mort says, in part, this:
I feared that The New York Times would assign a Reagan-hater to review Jack Kemp: The Bleeding Heart Conservative Who Changed America. Mercifully, it didn’t pick Paul Krugman, who would have been savage. Instead, it chose Tim Noah, now of Politico, whose review is polite, just misguided.
…. the big policy beef I have with the review is the assertion that Kemp’s signal achievement—the across-the-board supply-side tax cut proposal (“Kemp-Roth”) that became the basis of Reaganomics — “was a disaster.”
According to Noah, “it inaugurated two decades of sky-high budget deficits, accelerated a nascent growth trend in income inequality and did (depending on who you ask) little or nothing to ease the brutal 16-month recession that began around the same time the bill was passed.”
Noah systematically ignores the great economic turn-around in that Reagan achieved in the 1980s, using Kemp-Roth and then the 1986 tax reform partially developed by Kemp. He barely refers to the pre-Reagan 1970s—the era of “stagflation,” the “misery index” (unemployment up to 9 percent and inflation, 13.5 percent) and growth rates averaging 1.6 percent per year (vs. the post-war norm of 3.6 percent.)
Noah is right that the 1981-83 recession was brutal. It was caused by Federal Reserve Chairman Paul Volcker’s successful efforts to crush inflation by raising interest rates above 20 percent. Reagan’s 1981 tax cuts, lowering the top rate from 70 percent to 50 and the middle-income rate from 37 percent to 23, did not take full effect until the end of the recession.
Afterwards, there was a boom, not a disaster. The economy grew 7.8 percent in 1983, 5.6 percent in 1984, 4.3 percent in 1985 and averaged 4.5 percent for the rest of Reagan’s presidency and 3.7 percent through 2000. (See for yourself here.) The misery index dropped from a high of 23 in 1980 to 7.7 in 1986 and 9.7 in 1989. (Again, see for yourself.)
Sixteen million jobs were created during the Reagan years, a record exceeded only by Bill Clinton’s 22.9 million. (Clinton raised the top income tax rate from 36 percent to 39.6 percent in 1993, but reduced the capital gains tax rate from 28 percent to 20 percent, a distinctly supply side action.) In terms of percentage gains in job numbers, Clinton scored 20.8 percent, Reagan 17.7. Barack Obama, as of the end of 2014, had produced only a 4.3 percent increase. But George W. Bush trails all recent presidents with just a one percent increase, raising legitimate questions about the Republican party’s belief that tax cuts are the solution to every problem. Tax reform, lowering rates and eliminating loopholes, is a good idea, though.
… After Reagan (with help from Kemp) had passed the 1981 and 1986 tax cuts, those at the top were paying at a rate of 28 percent, but paying 55 percent of income taxes. Those below $30,000 paid a tax of 15 percent, but the personal exemption was raised to $2,000 and the standard deduction to $5,000, reducing their tax burden. The bottom 50 percent of taxpayers paid just 5.8 percent of all income taxes. Yet again, take a look.
Finally, Noah ignores the fact (see page 45 of our book) that Kemp modeled Kemp-Roth on proposals made by John F. Kennedy in 1962 and enacted after his death, dropping the top income tax rate from 90 percent to 70 percent. Kemp loved to quote Kennedy’s speech to the Economic Club of New York: “It is a paradoxical truth that tax rates are too high and tax revenues are too low. And the soundest way to raise revenues in the long run is to cut taxes now.” Kennedy’s proposals were hailed by Democrats at the time and opposed by Republicans as budget-busting. Most Democrats and practically every liberal (including Tim Noah) have forgotten that history.
The bottom line for me is that Kemp-Roth and Reaganomics worked–economically, politically and geopolitically. We’re in trouble again as we were in the 1970s. Incomes are flat. Growth is glacial. Voters are furious. Washington is paralyzed. What we need is ideas, not insults and more division. That—plus the fact that Kemp deserved a biography—is why we wrote the book.
Anyone who was fortunate in life to have crossed paths with Jack Kemp was privileged not just to meet a force of nature — I always thought the word “ebullient” under-described his enthusiasm — but to have known a genuine political rarity. As I wrote in this space back in January of 2009 when news of his illness became public Jack Kemp “changed his party, changed his country and, ultimately, changed the world.”
The Kondracke and Barnes biography is a long overdue, well-deserved and extraordinarily well-written in-depth chronicle of Jack’s life and work. The saga of his football career alone is a considerable story of talent but most importantly persistence. The latter a quality that was in evidence in his political career as well. This story of high school freshman Kemp — who was not a starter for his freshman team — is in microcosm the Kemp approach to life. Write Kondracke and Barnes:
Despite his drive, Kemp did not start for the freshman team. But one day Coach Jordan summoned him for a “confidential” talk. He told Kemp that if he was willing to work hard, he had the talent to make the National Football League. Kemp was thrilled. He took Jordan at his word and began working harder at practice and workouts. In those days, quarterbacks were not supposed to lift weights on the theory they’d develop the wrong muscles. But Kemp lifted anyway, to bulk up and build the strength that would make him a professional. With Kemp the conversation had the desired effect. And the weight training paid off. Before long he was able to throw a football eighty yards, and throw it hard. On his very first play with the Occidental (College) varsity, Kemp completed a sixty-yard touchdown pass. He was a sixty-minute man, playing safety on defense. He also punted. By his junior year he was the varsity starting quarterback. As a senior he became team captain and was the third-leading passer among small colleges and was named honorable-mention Little College All-American.
In a snapshot, this was the path that Kemp would follow all his life. Breaking into professional football is not an ambition for the faint-hearted, and in the beginning it was difficult. He was booted from the Pittsburgh Steelers for punting the ball — against instructions from his coach — not out of bounds but, so he thought, over the head of the “premier kick returner” in the NFL. The kick returner snagged the ball and Kemp was fired on the spot by his coach.
Lesson learned he played for the taxi squad of the New York Giants — only to be sent off to Canada to play in the Canadian Football League. Eventually he made his way to the new American Football League and the San Diego Chargers. In his second game of the 1962 season he was injured, suffering what the authors call his “famous injury.” Crashing his hand on to another player’s helmet as he was being “blitzed’ Kemp badly dislocated his middle finger on his throwing hand. For someone else that would have been the end of career as a quarterback. Not for Kemp. When informed that in resetting the finger it would stay that way forever, Kemp had the doctors “bend it in the shape of a football so that he could keep on passing.” Ouch. The move saved his career — but San Diego shipped him off to Buffalo and the new Buffalo Bills. Where Kemp promptly became — at long last — a star. And in the way of the mysterious world, it was in Buffalo that Kemp’s popularity won him a seat in Congress after he retired from football.
It is a curiosity that on the front page of the New York Times on January of 1967 there was a feature story on the about-to-be-sworn-in governor of California — Ronald Reagan. Inside the paper, on the sports pages, there was a photograph of the determined quarterback for the Buffalo Bills blowing his hands in the cold as he practiced with his teammates for the playoffs with the Kansas City Chiefs — a game that would determine which team would play in a brand new sporting event that would debut later in January. The game was being called “the Super Bowl” — “Chilled Bill” was the caption. The Bills, alas, would lose to the Chiefs. But in fact Jack Kemp’s real stardom was about to be linked to the man on the front page — the new Governor Reagan.
The Reagan-Kemp partnership would become one of the most important in late 20th century political history. It was Kemp who, just as he did with football, made a point of immersing himself in economics, determined to help his constituents in the Rust Belt city of Buffalo. Kondracke and Barnes do a wonderful job of recounting Kemp’s self-immersion in economic issues and what would become known as “supply-side economics.” “Kemp,” they write, was the Republican star of 1978, and he spent 1979 tirelessly evangelizing for his tax cut plan.
And so he did. Converting Reagan to his cause, and in an extraordinary moment getting his “Kemp-Roth” tax cut plan passed by Congress and signed by an enthusiastic Reagan. Kemp was in fact the congressional Godfather of Reaganomics and the economic boom that would last for almost a quarter century, as Kondracke details above.
One could go on here (as Kemp was wont to do endlessly in those famously long speeches of his).
But the best thing to do is…go buy the book. To learn from a man who was perhaps the most important figure in American history never to have become president. Jack Kemp’s imprint on his party, his country, and yes the world was indelible, his partnership with Reagan a study in not simply friendship but history.
He is missed.
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That’s right, the Grinch (Joe Biden) is coming for your pocketbooks this Christmas season with record inflation. Just to recap, here is a list of items that have gone up during his reign.
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