Excerpt from Forbes.com:
Remember prosperity? Want it back? Here’s the secret formula, which has always worked and would work again: Cut marginal tax rates and restore integrity to the dollar.
Donald Trump is campaigning on meaningful marginal tax rate cuts and implying, with his offstage praise of the gold standard, a solid instinct for monetary integrity and how to produce it. One hopes so as it requires both together.
Here’s the brief. Lawrence Kudlow and Brian Domitrovic have just published what deserves to be the most important book of the 2016 presidential election cycle: JFK and the Reagan Revolution: A Secret History of American Prosperity. It provides a solid understanding of the key issue of the 2016 race — the economy.
Reagan made “Supply-Side” famous by campaigning on and then enacting most of the Kemp-Roth 30% across-the-board tax rate cut. But John F. Kennedy was the original Supply-Sider. The book’s Big Reveal: Jack Kemp designed this tax cut as a direct copy of Kennedy’s own.
American memories are short. Most have forgotten the truly lousy economic growth of the 91%-top-tax-rate Eisenhower era (a rate for which Candidate Sanders expressed nostalgia). Most have forgotten Kennedy’s campaign promise to “get America moving again.” Most have forgotten his initial embrace of the Neo-Keynesian formula of high taxes, “easy” money from the Fed, and big spending infrastructure projects. And the failure of all that.
We forget JFK’s decisive pivot toward big marginal tax rate cuts while defending the dollar as defined by a fixed weight of gold. We only dimly remember the rip-roaring job creation that promptly followed the enactment of Kennedy’s tax rate cut after his assassination.
Sixteen years of economic stagnation have stupefied us as to how the economy inherited by Reagan, in 1981, was worse. Few remember that after the enactment of Reagan’s across-the-board marginal tax rate cuts (lowering the top rate from 70% to 50% and then, with overwhelming bipartisan support, to 28%), another prolonged period of massive job creation and economic growth ensued.
Reagan’s policies were subverted by his successor, President George H.W. Bush. This subversion is also vanished into the mists of history. During their primary campaign Bush had attacked Reagan’s tax-rate-cut promises as “Voodoo Economics.” Somehow the ensuing massive job creation never converted Bush.
Bush’s repudiation of his predecessor’s policies precipitated a recession and he lost his re-election bid. Bush hasn’t changed his mind. Politico reports that “Kathleen Hartington Kennedy Townsend, the former Maryland lieutenant governor and daughter of the late Robert F. Kennedy… posted a picture on her Facebook page shaking hands next to the former president and this caption: ‘The President told me he’s voting for Hillary!!’” Bush’s spokesman did not deny this claim.
Most also have forgotten how President Bill Clinton, after the Republicans took a Congressional majority, pivoted from his own misery-inducing Neo-Keynesian preferred policies to a supply-side policy mix. Regrettably, following Bush’s lead, Clinton also raised the top marginal tax rate.
That said, Clinton also cut the capital gains tax rate, embraced free trade, and mended a morally hazardous welfare system. He was rewarded by rip-roaring job creation and general prosperity. From those millions of new jobs came a federal budget surplus in place of deficits. This resulted in immense popularity.
Many have forgotten, although perhaps not forgiven, President George W. Bush’s abandonment of supply-side economics. That abdication caused a near decade of joblessness and economic misery.
Now do you remember? If not, Kudlow and Domitrovic to the rescue by showing how Supply-Side economics is not, by nature, a partisan thing. Democrats as well as Republicans love job creation. It’s great politics. The only thing that stands between us and greatness isn’t partisanship. It’s dogma.
Amazon rates Kudlow and Domitrovic’s JFK and the Reagan Revolution as the #1 new release in the category of economic history. Santayana taught us that “Those who cannot remember the past are condemned to repeat it.” Skipping this book is to connive at one’s own doom.
Read more at Forbes.com.