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Technology Stocks : George Gilder - Forbes ASAP
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To: George Gilder who wrote (139)10/2/1997 7:29:00 PM
From: JF Quinnelly   of 5853
 
I'm still curious as to how you answer Martin Anderson, a principal architect of President Reagan's economic program, and a man who advised Ronald Reagan since his first term as the Governor of California. (I'm sorry, I haven't located your answer to these questions farther up the thread). Martin Anderson specifically denies that anyone in the Reagan administration either stated or believed that cutting tax rates would cause enough growth to recoup the receipts lost due to the cuts. And he affirms that the Reagan economists were correct in this assessment.

Moreover, he specifically names you and Jude Wanniski for misrepresenting the Reagan economic program, calling your version "the myth of the supply-siders". (And Martin Anderson isn't the only Reagan economist to criticize your friend Jude Wanniski; William Niskanen makes similar criticisms in Reaganomics). You are in the position of arguing that Martin Anderson is unwilling to take credit for the good results of his program, or that he simply doesn't understand economics very well. I suppose that is possible, although since he is an economist I think the onus of proof is on those who aren't to prove that he doesn't know what he is talking about.

In the last election Bob Dole chose Martin Anderson to be his principal economic advisor. The Dole campaign claimed to be looking for economic growth to recapture around 28% of his proposed tax rate reductions, which is consistent with the writing of both Lawrence Lindsey and Martin Anderson. The strategy sessions of that campaign must have been real entertaining, since Jack Kemp had Jude Wanniski advising him.

In your comparison of a national economy to that of a firm you are claiming to know what the elasticity of demand is in response to tax cuts (the Laffer Curve being an elasticity of demand curve). It is simply not true that all reductions in prices (taxes) will result in an increase in sales (revenues). As you must be aware, your claim is only true for certain regions of demand curves, or if the demand curve itself shifts. There seems to be an inherent problem in claiming to know or predict where a nation is on a Laffer curve, as it can really only be measured in retrospect.
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