What Is Supply-Side Economics? Four Decades Later Wikipedia and Academic Economists Still Don't Know

Citation metadata

Date: Winter 2021
From: Independent Review(Vol. 25, Issue 3)
Publisher: Independent Institute
Document Type: Report
Length: 1,697 words
Lexile Measure: 1310L

Document controls

Main content

Article Preview :

It is difficult for truth to emerge anywhere. History, politics, science, medicine, crime and punishment, any academic subject, neighborhood gossip--wherever one looks, falsehood abounds. It is no different for supply-side economics.

It has been four decades since the Reagan administration gave up on Keynesian demand management, which had resulted in "stagflation"--that is, worsening Phillips curve trade-offs between employment and inflation. Now thirty-nine years later (if the Wikipedia entry on supply-side economics most recently updated on June 28, 2020, can be trusted), journalists, academic economists, and whoever writes Wikipedia entries have no idea what supply-side economics is or what the problem was that it addressed successfully. Indeed, I would be hard pressed to imagine a more incorrect explanation of supply-side economics than the one in Wikipedia, buttressed by uninformed statements by Gregory Mankiw, Paul Krugman, and Alan Blinder.

No one has been more intimately involved with supply-side economics than I. I was an expositor and an advocate. In 1975, I penned an article for U.S. representative Jack Kemp calling for a supply-side policy that was published in the Sunday Washington Star. I was involved in the policy process in the House and Senate, where the ground was prepared among Republicans and Democrats for the emergence of a supply-side policy. I drafted the Kemp-Roth bill that became what the media called "Reaganomics." I taught the Congress how to use the budget process to enact a supply-side policy. I was appointed Treasury assistant secretary and tasked with getting a supply-side policy out of the administration for a congressional vote. I was invited to give the annual state-of-the-economy address to the combined economic graduate students and faculties of Harvard and MIT where I received a standing ovation. It was my peer-reviewed book The Supply-Side Revolution--published by Harvard University Press in 1984, remaining in print for decades, and appearing in a Chinese-language edition--that explained supply-side theory and the problems of getting it into practice. I was the one who wrote the supply-side entry for The New Palgrave Dictionary of Money and Finance (MacMillan 1992 Vol. 3) and for McGraw-Hill's Encyclopedia of Economics (1994) in the 1980s, plus a separate entry for the Laffer curve in the former (Vol. 2). I am the economist who explained the theory and practice in the leading scholarly economic journals in Germany and Italy. I am the one who explained it to the French government, for which I received the Legion of Honor. I explained it in the journal The Public Interest in the United States and in British bank and policy magazines. I...

Source Citation

Source Citation   

Gale Document Number: GALE|A652364019