Then and Now

     When “supply-side economics” was still new

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Posted in Uncategorized

As a young economics reporter for The Boston Globe, I wrote this in September 1982. The Tax Equity and Fiscal Responsibility Act, an emergency measure, had just been enacted to claw back several of the more extravagant reductions of the big Reagan tax cuts of the previous year, in order to prevent runaway deficits.  It was meant to be chanted.

                                WANNISKI! LAFFER! GILDER! KEMP!

Being a chronicle of the rise and fall of supply-side economics, concocted with apologies to Vachel Lindsay, the populist poet laureate whose words and sentiments I appropriated. Lindsay’s “Bryan, Bryan, Bryan, Bryan” chronicled the free silver movement in 1896. Mostly the names have been changed.

There are plenty of sweeping, swinging, stinging, gorgeous things to shout about,

And knock your old blue devils out.

I brag and chant of Wanniski! Laffer! Gilder! Kemp!

Contestants for the public’s ear who sketched a supply side paradise

American economists who could speak in words.

They promised tides of wonder, of unprecedented splendor,

Wild roses from the plains that made hearts tender,

All the funny circus silks of politics unfurled,

Bartlett pears of romance that were honey at the cores,

And torch-lights down to the street, to the end of the world.

An incredible boom they promised, if only we would cut taxes.

There were truths eternal in the gab and tittle-tattle.

There were real heads broken in the fustian and the rattle.

There were real lines drawn: Not supply and demand

But the wishful cry went eastward from California against the dour and the old,

The mean and the cold. I think I can! I think I can!

.                                  I.

It was nineteen seventy-five and OPEC was in the saddle

And Nixon had left the White House with a Ford,

When there came from the Sunset, from a dozen voices at once,

A wild cry, a whoop: Cut taxes and keep money tight!

From Mundell and Laffer in Washington;

From Bacon and Eltis in England;

From Gilder and Wanniski at Basic.

They scoured the elephant plutocrats

With quotations from Ibn Khaldoun.

The scales dropped from their mighty eyes.

They saw that summer’s noon

A tribe of wonders coming

To a marching tune.

Oh, the longhorns from Texas,

The jay hawks from Kansas,

The plop-eyed bungaroo and giant giassicus,

The varmint, chipmunk, bugaboo

The horned toad, prairie-dog and ballyhoo,

From all the newborn states arow,

A tax revolt!

The fawn, prodactyl and thing-a-ma-jig,

The rakaboor, the hellangone,

The whangdoodle, batfowl and pig,

The coyote, Jarvis-Gann and constitutional spending limit,

In a miracle of health and speed, the whole breed abreast,

They leaped the Mississippi, blue border of the West,

Came to Massachusetts, three thousand miles away:

Against the neo-Keynsian synthesis,

Ah, sharp was their song.

Against the neo-Keynesian synthesis, too cunning for the young,

Proposition 13, Proposition 2 ½ , gave tongue.

These creatures were defending things Arthur Burns never dreamed:

The moods of airy childhood that in desert dews gleamed,

The gossamers and whimsies,

The monkeyshines and didoes

Rank and strange,

Of the canyons and the range,

Of supply elasticities,

The ultimate fantastics

Of the Laffer Curve,

And of magnificent inventions

Marketed beneath the Wedge,

Amid falling marginal rates,

Of the babies born at midnight

In the sod huts of lost hope,

With no physician there

Except a Kansas prayer

With the Indian raid a-howling through the air,

And the revenuer and the OSHA inspector

A distant bad dream.

And all these in their helpless days

By the dour East oppressed,

Mean paternalism,

Making their mistakes for them,

Crucifying half the West,

Till the whole Atlantic coast

Seemed a giant spider’s nest –

Especially Washington.

All these children and their sons

At last rode through the cactus,

A cliff of mighty cowboys

On the lope,

With gun and rope.

And all the way to frightened Maine the old East heard them call,

And saw Reagan by a mile lead the wall

Of men and whirling flowers and beasts.

And the bards and prophets among them,

Prairie avengers, mountain lions,

Wanniski! Laffer! Gilder! Kemp!

Gigantic troubadors, speaking like siege guns,

Smashing Plymouth Rock with boulders from the West,

And just a hundred miles behind, tornadoes piled across the sky,

Blotting out sun and moon,

A sign on high.

Cut taxes and keep money tight!

Headlong, dazed and blinking in the weird green light,

The scalawags, Democrats and Eisenhower Republicans alike,

Made moan, afraid to fight.

.                                    II.

When Laffer sketched his famous napkin-curve;

When Wanniski announced how the world worked,

And illustrated his lessons

With empirical evidences drawn from the life of his three-year- old child;

When Gilder found that capitalism began with giving;

And Kemp led a movement in the House;

A nation stopped and listened, applauded,

Bidding the eagles of supply-side fly on,

Bidding the eagles of supply-side fly on.

Heard the wooly, bully news:

Cut taxes to fight inflation, to boost production,

To unleash a hundred million miracles of the mind.

And so the president and the Congress did.

Cut hell out of taxes,

Upped defense spending to boot.

Pigs feeding at the trough

Saw apples in the air.

A tiny worry loomed afar.

A speck, a hive, a football,

A captive balloon!

A deficit.

.                              III.

Then the president went out

To explain himself.

Oh, he was the ultimate supply sider

(You only need just one).

“We shall not balance the budget on rhe backs of the American taxpayer….”

And everybody heard him –

In the streets and the Wall Street canyons

And in the capitals of Germany and Japan

Big deficits, no sweat.

.                        IV.

February, March, suspense.

Wall Street lost to sense.

April, May, June,

More suspense,

The whole east down like a wind-smashed fence,

With the prime rate at seventeen.

Then Volcker to the rescue,

Volcker of the Fed,

Rallying the roller-tops,

Rallying the bucket-shops,

Threatening drouth and death,

Promising recovery,

Fighting inflation,

Strangling growth,

Rallying congressmen against the bawling flannelmouths;

Scaring corporations,

(Scaring himself,

Watching Mexico tumble towards default)

Calling for more taxes,

Giving testimony,

Then pouring on the long green to a dozen debtor nations

Spondulix by the mountain load, to stop each new tornado,

And beat the cheapskate, blatherkite,

Populistic, anarchistic

Deacon-desperados.

The supply-siders left the government,

One by one.

.                     V.

The tax bill at midnight:

Supply-siders’ defeat

Defeat of tax-cut fever.

Gone with just a peep.

Victory of letterfiles

And economists in miles

With chalk dust upon their coats,

Government buttons on their vests

And Wall Street on their minds.

Victory of custodians,

Plymouth Rock,

And all that inbred landlord stock.

Victory of the neat.

Defeat of the smokestacks of newly-risen factories,

The high tech startups of New England,

And marginal ventures of the Southwest

By the bond-traders.

Defeat of the young by the old and silly.

Defeat of tornadoes by the poison vats supreme.

Defeat of my boyhood. Defeat of my dream.

.                           VI.

Where is Donald Regan, that respectable Don Regan,

The man without an angle or a tangle,

Who soothed down the President and soothed down the Treasury,

The Appropriations Committee, the Ways And Means Committee,

Who climbed every greasy pole and slipped through every crack;

Who soothed down the restaurant lobby, the thrift lobby, the defense lobby

The devil vote, the angel vote, the neutral vote,

The desperately wicked and their victims on the rack,

The supply vote, the demand vote, the deflate vote, the reflate vote,

Every vote?…

He’s in the corner office,

With Marty Feldstein on the way,

The cautious, righteous Feldstein,

Heretofore above the fray.

Where is David Stockman, Henry Kaufman’s David Stockman, His slave, his echo, his suit of clothes?

He’s in the other corner office

With the budget in his pocket

A traitor to his classmates,

Heaven knows.

Where is Herb Stein, nasty old Stein,

Who coined “punk supply-sideism”

To malign his foes?

He’s back in grace in Washington,

With all the other graybeards,

Dispensing cold wisdom

To add to our woes.

Where is stout Wanniski, the coal-miner’s son,

Who trumpeted the gospel from The Wall Street Journal?

On his way to join the shadows, with William Coin Harvey,

In Morristown, New Jersey, a consultant now.

Where is faithful Gilder, the absent-minded sage,

The hard-running poet who thought love was all,

Impelled to greater effort, against all reason,

By the cruel progressive tax system, which wiped out the gains?

Sure to join the shadows with the shade of Elbert Hubbard,

A Tyringham Yankee with a legion of friends.

Where is Arthur Laffer, flamboyant as the rose

Whose name economists still say with tears?

He’s marrying a student, teaching economics, pulling down a million bucks a year.

Soon to join the ironies with old Henry George,

Whose fame rings loud for a thousand years.

Where is that boy, that football-born Kemp,

That hard-passing Kemp, who rolled-out from Buffalo?

Bound to join the shadows with William Jennings Bryan

Where the populists and flakes and the troubadours rest.

.                              xxx

That was then, 1982.  Back next Sunday with Now.