A few days ago, The Krug put his crayons to paper and wrote what appears to be an op-ed, this one attacking supply-side economics and advocating Krugmanomics.
But now it looks as if voodoo is making a comeback. At the state level, Republican governors — and Gov. Sam Brownback of Kansas, in particular — have been going all in on tax cuts despite troubled budgets, with confident assertions that growth will solve all problems. It’s not happening, and in Kansas a rebellion by moderates may deliver the state to Democrats. But the true believers show no sign of wavering.
Meanwhile, in Congress Paul Ryan, the chairman of the House Budget Committee, is dropping broad hints that after the election he and his colleagues will do what the Bushies never did, try to push the budget office into adopting “dynamic scoring,” that is, assuming a big economic payoff from tax cuts.
Tim Worstall then wrote this response to The Krug at Forbes.com:
It does rather boggle the mind that a Nobel Laureate economist is against the idea that we should try to estimate the changes in peoples’ activities in response to changes in incentives. Maybe we’re not very good at it, maybe we won’t get the perfectly correct answer. But the core of the whole economics project is that people respond to incentives. So shouldn’t we try to work out how before we change public policy?
Ralph Benko for Forbes.com:
Also, we mentioned George Will’s positive article about Jeff Bell that appeared in the Pittsburgh Tribune-Review this past Sunday, well that same article appeared in Monday’s New York Post.
African American Conservatives (AACONS) has posted a podcast at Blog Talk Radio, and this one features two interviews, one with Congressman Paul Ryan and one with Steve Forbes. Listen to the interviews here in one file.
Congressman Paul Ryan released a new book today, sparking 2016 speculation along with it. The Way Forward: Renewing the American Idea is a very good, easy read so far. Surely there will be other supply-side nuggets later, but this passage on page 55 really jumped off the page.
In interviewing with Jack Kemp for a job at Empower America, Ryan recalls this exchange:
He asked me, “What do you think is better-a tax credit or a tax-rate reduction? Should we reduce tax rates or should we give people tax credits?”
I knew what he was up to. Kemp was famous for convincing President Reagan of the merits of supply-side economics. As a member of Congress, he had authored the Reagan tax cuts, and his pro-growth ideas helped create the economic expansion of the 1980s and 1990s. Jack Kemp didn’t just join the Reagan Revolution; he was the chief architect of some of its greatest victories.
In asking certain questions, he was trying to see if I was “on the model,” which was a term we used for supply-siders of those days. I was. “A reduction in tax rates,” I replied, “because growth occurs at the margin.”
Fresh brew tonight with Stephen Moore in the Wall Street Journal:
Like his mentor Jack Kemp, Paul Ryan understands that growth makes a balanced budget easier to achieve.
Mr. Ryan broke into politics in the 1990s at Empower America, where he became a protégé of former Buffalo Congressman Jack Kemp, the pro-growth, pro-trade, pro-immigration leader of the GOP during the Reagan revolution and into the 1990s. Kemp understood, as Mr. Ryan also does, that while spending restraint is important, faster economic growth is a precondition to averting a fiscal impasse. More than anyone else in Washington in recent years, Mr. Ryan has adopted the Reagan-Kemp message.
At Empower America, Mr. Ryan worked with Kemp on issues ranging from enterprise zones for inner cities to school choice. Like Kemp, Mr. Ryan has always made a case that free-market policies benefit minorities and poor people generally who are “capital deprived.” That message has special resonance now given the reversal of minority progress on income growth, and the high black and Hispanic unemployment rates, during the Obama years.
Congressman Paul Ryan gave a speech today titled Shared Scarcity versus Renewed Prosperity. The speech at the Economic Club of Chicago is already drawing reviews (good and not-so-good), including from the Heartland Institute.