The once and perhaps future Speaker of the U.S. House of Representatives recently announced that a centerpiece of her party’s campaign to recapture the federal legislature this fall would be the repeal of the recently-enacted personal and corporate income tax reductions. I’m quite sure that the whirring sound I heard immediately following Mrs. Pelosi’s pronouncement was made by the late, lamented Bob Bartley, spinning in his grave.
Robert L. Bartley (1937-2003) was the editor of the editorial page of The Wall Street Journal for 30 years. Most importantly, he both participated in, and was the chief chronicler of, the rise of supply-side economics, as the Keynesian synthesis shattered and the stagflationary 1970s lurched toward implosion.
Mr. Bartley, along with his WSJ colleague Jude Wanniski, the economists Arthur Laffer and Robert Mundell, and Representative Jack Kemp, were groping toward a new economics. What they discovered was that the battle had to be fought on two fronts.
As Mr. Bartley reported in his editorial pages, and later wrote in his landmark book: “You fight inflation with monetary policy, preferably international and preferably with a commodity link, but in any event with tight money. And you fight stagflation, you stimulate the economy, with incentive-directed tax cuts. You find the highest marginal rates and cut them (emphasis added).” These insights became, in effect, the Reagan Revolution as it related to the economy.
His book is The Seven Fat Years. There have since been, and surely will be in the future, important books about the Eighties, most notably (so far) Brian Domitrovic’s Econoclasts. But there never was, and can never be, a more thorough, more brilliantly written account by one of the central actors – indeed, second only to Reagan himself, the revolution’s chief spokesman.
That today we find ourselves in a sense back in the Seventies – with the whole idea of marginal rate reductions being demonized as trickle-down tax cuts for corporations and “the rich” that must explode the deficit – is perhaps a commentary on the eternal pendulum that is the central dynamic of our democracy. But it makes The Seven Fat Years urgently important reading for the informed financial advisor.
Bob Bartley died of prostate cancer in December 2003. A few days before he passed, President George W. Bush called his home on Brooklyn Heights to confer on him the Presidential Medal of Freedom, our nation’s highest civilian honor. To read his The Seven Fat Years is to understand how richly he deserved it.
© 2018 Nick Murray. All rights reserved. Reprinted by permission. Nick reviews current books, articles and research findings for advisors in his monthly newsletter, Nick Murray Interactive. His most recent book is Around the Year with Nick Murray: Daily Readings for Financial Advisors, now available in hardcover and as a password-protected eBook.