America lost two tax-cutting heroes last week — former Wall Street Journal editor Robert L. Bartley and former Republican senator from Delaware, William Roth. I knew both men well, having worked with Roth and his staff in creating the Kemp-Roth bill and having served on Bartley’s editorial page.
Both men did much for America: Roth cut tax rates, gave us the Roth IRA and championed the taxpayer against IRS abuse; Bartley acquainted influential people with an alternative policy to Keynesian demand management, which had mired the economy in stagflation.
Neither Bartley nor Roth was afraid of controversy. Neither were they intimidated by Machiavelli’s dictum that “there is nothing more difficult, more perilous or more uncertain of success, than to take the lead in introducing a new order of things.”
Roth’s death, on the heel of Bartley’s, reminds us that there was another dimension to tax-cutting than editorial writing. Jude Wanniski was such a successful publicist for supply-side economics that to this day the folklore prevails over the reality. Editorials, curves drawn on napkins and late night dinners in lower Manhattan may inspire but alone cannot change U.S. economic policy. Another, parallel, battle was going on in the policy corridors of Washington, D.C.
The battle for supply-side economics was conducted in congressional committees, in fights over budget resolutions on the floor of the House and Senate, and in critiques of the economic models used to justify Keynesian economic policy.
A small group of U.S. representatives, senators and congressional staff carried the policy fight to the Keynesian establishment, which controlled the enormous resources of the Office of Management and Budget, the Treasury, the Congressional Budget Office, the Congressional Research Service, and the staffs of the House and Senate budget committees, the Joint Economic Committee, the Joint Tax Committee, the Ways and Means Committee and the Senate finance Committee.
In those days, policy belonged to Democrats. To win, supply-siders had to convince important Democrats, such as JEC chairman Lloyd Bentsen, Finance Committee chairman Russell Long and defense hawk Sam Nunn.
More often than not, minority staffs and ranking minority members were in the way. Most Republicans were in thrall of Wall Street advice that tax cuts meant deficits and high interest rates and falling stock and bond prices. Give us a balanced budget, they clamored, even if you have to raise taxes to pay for spending.
The Journal’s editorials reduced the influence of the Wall Street economists. Bartley’s support was critical in 1981, when the Washington establishment did its best to shut down the supply-siders in the Treasury before the tax cut was safe.
I joined the Journal’s editorial page in 1978, as Jude Wanniski’s replacement. Fresh from the congressional staff where I drafted the Kemp-Roth Bill and instructed Republicans in its use against the Democrats’ budget resolutions, I was Bartley’s way of continuing his investment in supply-side economics.
My journalistic qualifications consisted of two recent articles, “The Breakdown of the Keynesian Model” in The Public Interest, and “Disguising the Tax Burden” in Harper’s. Both articles were boat-rockers. One challenged the efficacy of demand management, and the other showed that the revenues from the tax reform plan of Sens. Muskie and Kennedy would come out of the hide of the middle class. This revelation got the attention of the morning TV talk shows, and Congress and killed the bill.
To sign me on, Bartley offered a personal column, “Political Economy,” and the title of associate editor of the editorial page. “Now,” Bartley said, “no one can say you aren’t a journalist,” and roared with laughter.
Bob Bartley was ambitious. His ambition made him willing to take risks with ideas and to surround himself with idea people. He encouraged us to rock boats, to analyze and report, and to break news stories. “Go to Washington and see what is going on,” he would urge.
Bartley was appreciated also for his stalwartness in standing up to the Soviets. But in recent years, his aggressive neoconservative foreign policy lost him a certain amount of support. Bartley did not see the paradox in his position of wanting to impose American values on the world while simultaneously championing other policies — open borders, mass immigration and globalism — that are dissolving America herself.
Roth and Bartley were instrumental in reviving the U.S. economy from its malaise. They made a difference.