Supply-side economics is not merely a generalized preference for small government with low taxes, but a commitment to the cause of low taxes, particularly for high earners, that borders on theological.
.. The Republican stance on taxes, like its position on climate change (fake) and national health insurance (against it), is unique among right-of-center parties in the industrialized world.
.. In 2012, every Republican presidential candidate, including moderate Jon Huntsman, indicated they would oppose accepting even a dollar of higher taxes in return for $10 dollars of spending cuts.
.. Kudlow attributes every positive economic indicator to lower taxes, and every piece of negative news to higher taxes.
.. In 1993, when Bill Clinton proposed an increase in the top tax rate from 31 percent to 39.6 percent, Kudlow wrote, “There is no question that President Clinton’s across-the-board tax increases … will throw a wet blanket over the recovery and depress the economy’s long-run potential to grow.”
.. This was wrong. Instead, a boom ensued. Rather than question his analysis, Kudlow switched to crediting the results to the great tax-cutter, Ronald Reagan. “The politician most responsible for laying the groundwork for this prosperous era is not Bill Clinton, but Ronald Reagan,” he argued in February, 2000.
.. By the time George W. Bush took office, Kudlow was plumping for his tax-cut plan. Kudlow not only endorsed Bush’s argument that the budget surplus he inherited from Clinton — the one Kudlow and his allies had insisted in 1993 could never happen, because the tax hikes would strangle the economy — would turn out to be even larger than forecast.
.. Kudlow then began to relentlessly tout Bush’s economic program. “The shock therapy of decisive war will elevate the stock market by a couple-thousand points,” he predicted in 2002. That was wrong. He began to insist that the housing bubble that was forming was a hallucination imagined by Bush’s liberal critics who refused to appreciate the magic of the Bush boom. He made this case over and over (“There’s no recession coming. The pessimistas were wrong. It’s not going to happen. At a bare minimum, we are looking at Goldilocks 2.0. (And that’s a minimum).
.. When Obama took office, Kudlow was detecting an “inflationary bubble.” That was wrong. He warned in 2009 that the administration “is waging war on investors. He’s waging war against businesses. He’s waging war against bondholders. These are very bad things.” That was also wrong, and when the recovery proceeded, by 2011, he credited the Bush tax cuts for the recovery.
.. Kansas, where he advised Republican governor Sam Brownback to implement a sweeping tax-cut plan that would produce faster growth. This was wrong. Alas, Brownback’s program has proven a comprehensive failure, falling short of all its promises and leaving the state in fiscal turmoil.
.. The onset of deficits exceeding a trillion dollars a year in the midst of low unemployment has not prompted any regret, or even a hint of willingness to compromise on the party’s rigid opposition to higher taxes.
This was the Trump agenda even with the relatively moderate Gary Cohn running the National Economic Council. Now that true believer Lawrence Kudlow is taking the helm, the dawn of fiscal sanity in the GOP is receding ever farther into the distant future.