- - Tuesday, May 7, 2019

ANALYSIS/OPINION:

“U.S. Jobless Rate Hits 50-Year Low As Wages Expand.” “Bright Economic Picture Chases Away Fears of Brewing Recession.” “Job Growth Continues Its Record Streak.” These words of admiration do not come from White House acolytes, but have been featured on the front pages of two of the administration’s fiercest critics: The Washington Post and The New York Times. Nor are they the only anti-Trump outlets willing to celebrate the results of the president’s economic policies. The big-name liberal journalists on those morning Sunday talk shows, “Meet the Press” and “This Week” come immediately to mind, have been handing out laurel wreaths as well.

Princeton’s Alan Blinder, once a harsh critic of the administration’s tax-and-regulatory reforms, has publicly changed his mind. The liberal professor, though still a friend of Obamanomics, now lauds Trumponomics as well. The tax cuts he once denounced, he now concedes, did not cause the inflation that he and his fellow liberals had feared, but “have boosted economic growth” — stunning growth, in fact, and just as Mr. Trump’s supply-side advisers predicted.

Supply-side economics has been trashed to a fare-thee-well by liberal economists ever since Ronald Reagan embraced it, despite the overwhelming evidence of its success. (See Larry Kudlow’s and Brian Domitrovic’s “JFK and the Reagan Revolution.”) And its champions were instrumental in crafting the increasingly lauded tax-cut and tax-reform law of 2017.

Three important presidential advisers, Arthur Laffer, the highly credentialed father of supply-side theory, Larry Kudlow, director of the President’s National Economic Council and Stephen Moore, Heritage’s supply-side expert, were critical to the passage of the Republican tax legislation that those across the ideological spectrum now salute as a major hit.

Yet, the president’s tax and regulatory proposal appeared to be on life support until these men decided to rescue it with a piece that ran in The New York Times on April 19, 2017.



Sensing Mr. Trump’s much pledged tax reform vision was drifting to nowhere, they outlined what would become the core of the legislation that eventually passed the Congress: Easing major tax and regulatory burdens on large and small businesses which have “made America increasingly uncompetitive in global markets,” allowing businesses “to immediately deduct the full cost” of new factories, equipment and machinery, inducing overseas American corporations to come home, which could attract “$2 trillion to these shores,” and giving support for a middle-class tax cut. They also offered expert tactical advice, insisting that tax reform “should be kept as simple and understandable as possible.”

The column lit a volcano under the White House and influential Republicans in Congress and across the country. Political journalist Fred Barnes called it the “op-ed that changed the world.” And so it did.

What is not widely known is that the president’s daughter, Ivanka, played a major role, making sure that her father would give it his undivided attention. An ally of the supply-siders, she cut the column out of The Times that morning, and, as Mr. Laffer and Mr. Moore relate in their book, “Trumponomics,” “put it at the top of a stack of must-read items for the president as he sat behind his desk in the Oval Office.” He not only read it and marked it up, but immediately called in his “legislative, political and economic advisory teams ” Pointing to the article, he barked: “This is the way we are going to get it done No more delays.”

Just three days later, Gary Cohn, chairman of the National Economic Council, and Steve Mnuchin, Treasury secretary, presented the latest version of the Trump tax plan, which was clearly influenced by The Times’ article. A few days after that, the president “demanded that Congress get a tax bill on his desk before Christmas.” With The Times piece and the president’s enthusiasm as their inspiration, Congress passed the tax bill on Dec. 20 — five days before Mr. Trump’s deadline.

The results are now in: A huge jump in the GNP, booming job growth, the lowest unemployment rate in decades (especially among blacks and Hispanics), a surge in business investment, jobs and the labor participation rate, rising wages, explosive growth in wealth for millions of American workers and retirees with 401k savings plans, etc.

The president’s overall job approval rating has climbed again to the mid 40s, but his job approval rating on the economy, according to Real Clear Politics, is in the healthy mid-50s. Though the plaudits from their foes are unlikely to last, Donald Trump’s supply-side economists should take a well deserved bow.

Allan H. Ryskind was a longtime editor and owner of Human Events. His latest book is “Hollywood Traitors” (Regnery, 2015).

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