So TC, apologies for being away for a while but seems things have moved on slightly since then, just getting back to what you posted directly for me – I firstly went and read the link you gave me to Mundell’s Prize lecture
I haven’t yet gone to his own website but plan on reading that paper as well, I’m sure its worth the $5 for a bit of insight into a leading thinker. And yes to make it clear here I do respect Robert Mundell and enjoyed reading his lecture. What irritates me is that you take a very small minded view and insist that if someone does not hold the same ideals they are not even worth communicating with, I am all for debate and we may well actually agree on many things but it’s not worth the hassle of delving through your vitriolic statements and anti-marxist abuse to get to the good stuff. Anyway onwards and upwards!
In reading the lecture I was particularly interested in the part where he describes how “supply-side economics began as a policy system alternative to short-run Keynesian and monetarist demand-side models” and how “it was partly a continuation of my work on the policy mix in the 1960’s” (pg 237)
This was so interesting to me because in an earlier statement of yours you claim that “If you look at the 20th century supply side economics produced three eras of GDP expansion, 1922-29 1964-69 and 1983-1990” (TC Fri 05 PM) So how did this happen when Mundell (your hero) claims that it wasn’t invented until the 1960’s? You also remark upon how “American supply side economics didn’t even begin until 1913” (TC Fri 2am) Well actually they didn’t begin until the late 1960’s. I can see your confusion, after all Andrew Mellon did reduce marginal tax rates while maintaining moderate interest rates, he just didn’t know that what he was doing was called supply side economics, because it didn’t exist yet. So did Mundell actually invent it or did he just steal it from Mellon? Or even someone further back in history?
He also throughout the whole piece refers to the IMF and how international monetary policy was what was affecting the USA so badly, with particular references to the Bretton Woods agreement and the international gold standard. Again this is peculiar as you refer to how this is a purely American model and is non-European. Indeed Mundell refers to fact that “the withdrawal of the Soviet Union from Eastern Europe ...was...partly due to the success of supply-side economics” (Damn it I mentioned the commies again)
I’m also intrigued that you make no mention of Laffer even though it’s his curve that most simply and effectively demonstrates the argument for lowering marginal tax rates? What are our feelings about him? I also found Jude Wanniski’s comments interesting, particularly her open letter to Robert Reich following his debate with Jack Kemp on Late Edition. In that she claims to have created the supply-side model, having “merged it out of the ideas of two economists, Art Laffer and Bob Mundell” The best bit about her arguments is she is apolitical and has in fact belonged to both political parties. Economic arguments are far more effective when they’re divorced from politics.
I've Always Wondered...
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