Wednesday, August 31, 2005

Jude Wanniski, father of supply-side economics, 1936-2005

James K. Glassman has the perfect obituary for Jude Wanniski, a one-of-a-kind phenomenon who left a tremendous mark on the world, even though few have heard of him. As Glassman notes, Wanniski combined confidence bordering on megalomania with intellectual curiosity, contrarianism with optimism. He was a fearless independent thinker eager to share his insights with those with the power to apply them.

Wanniski, best known for inventing the term "supply-side economics" and for popularizing the Laffer Curve, was once an editorial writer at the Wall Street Journal and later an adviser to President Reagan, before starting his own consulting firm. He was instrumental in bringing about the tax cuts which swept America and Britain in the 1980s, and in changing the way a generation thought about taxation.

In recent years, his contrarianism turned him against Israel and made him into an outspoken defender of Louis Farrakhan, Saddam Hussein and the People's Republic of China. Cynics wondered whether he naturally saw good in tyrannies and mendacity in democracies. His last published column is full of his usual ignorant nonsense about Israel; it was published, of all places, by Al-Jazeera.

I followed his writings eagerly on his website for a few years in the late '90s, doggedly ignoring his political views but curious to understand his unique perspective on global economics, based, he claimed, on the theories of economists Robert Mundell and Ludwig von Mises. Few economic commentators had as comprehensive a theory of "the way the world works" as he, and I was determined to figure out whether he was right. I'm still not quite sure.

One of his most controversial claims was his insistence on the continued centrality of the price of gold as a measure of economic value. A return to the gold standard, he argued, would restore stability to world commerce. Take it or leave it; here he argues that high and unstable gold prices are responsible for the current record price of oil.

Overall, I'm not sure what to make of the man, but you could do worse with your time than to peruse the curriculum of his Supply-Side University.

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