Review by New York Times Review
IF SPACE ALIENS were to land a flying saucer on the Capitol's South Lawn, one question they might ask is: Wherever did you get the idea that cutting taxes would increase revenue? That was the premise of supply-side economics as practiced by Jack Kemp, and it's a certainty that if Kemp were still alive - he died in 2009 at 73 - he'd drop whatever he was doing and answer at such length that the little green men might be sorry they asked. A relentlessly ebullient onetime quarterback for the Buffalo Bills, Kemp served 18 years in Congress as a representative for western New York, achieving political stardom by pushing through Ronald Reagan's 1981 tax cut, of which Kemp and Senator William V. Roth Jr., Republican of Delaware, were the principal authors. "Jack Kemp," a new biography by Morton Kondracke and Fred Barnes - two right-of-center political journalists best known as co-hosts of "The Beltway Boys," which ran for a decade on Fox News - gets off to a shaky start by stating that the Kemp-Roth bill helped "set off an economic boom that lasted into the 2000s." In fact, Kemp-Roth was a disaster. It inaugurated two decades of sky-high budget deficits, accelerated a nascent growth trend in income inequality and did (depending on who you ask) little or nothing to ease the brutal 16-month recession that began around the same time the bill was passed. Whether the law boosted tax receipts is a point on which Kondracke and Barnes remain politely agnostic, but the evidence couldn't be clearer. The law reduced revenues by $111 billion over four years, according to the Treasury Department. That's well over $200 billion in 2015 dollars. Reagan ended up having to increase taxes (over Kemp's loud objections) one year later, and still was only partly successful in stanching the red ink. But the bill made Kemp a Republican star, because it knocked the top income tax rate lower than it had been since the 1930s. It was, Kondracke and Barnes observe, "Reagan's most important domestic achievement." An interesting question is why Kemp was never able to capitalize on the prominent role he played in that victory, or on his lesser role in lowering tax rates even further (this time in exchange for closing loopholes) in the 1986 tax reform bill. Kemp was, through most of the 1980s, the most plausible inheritor of Reagan's mantle. While still a football player of some renown, he had worked during the off-season as an intern for Governor Reagan. In 1978 he had passed, with Roth, a modest tax cut (and a significant cut in the capital gains tax) that became a precursor to the 1981 bill. It was Kemp who sold Reagan on making the larger supply-side cut a centerpiece of his 1980 campaign. Reagan had not, Kondracke and Barnes point out, run in 1976 as a tax cutter. But "in 1980 he did - specifically, on the program written and fought for by Kemp." Granted, Kemp doesn't deserve sole credit. Between 1976 and 1980, rising inflation set off a tax revolt that no conservative politician could ignore. Pensioners in California paying ever-higher property taxes, egged on by the Los Angeles businessman and sometime political candidate Howard Jarvis, passed Proposition 13, which lowered property taxes and imposed a two-thirds-majority requirement on future statewide tax increases. At the federal level, double-digit inflation pushed households into higher income-tax brackets ("bracket creep"), a problem solved only when the 1981 tax cut sensibly tied future bracket thresholds to inflation. Reagan was a ready convert to supply-side economics because, as a highly paid Hollywood actor, he had hated paying the top marginal tax rate of 91 percent. Indeed, as early as 1961, Reagan said, he had argued that rates that high "brought the government very little revenue." Still, Kemp articulated the tax-cut philosophy that came to be known as Reaganomics before candidate Reagan did - and Kemp would continue to champion it after Reagan edged away. That may have been part of Kemp's problem. Whatever (admittedly slim) possibility there was that Reagan might favor Kemp for the presidency in 1988 over his own vice president, George H.W. Bush, was erased by Kemp's constant griping that Reagan was selling out the supply-side cause. In his diary and in public comments, Reagan called Kemp "unreasonable" and "a purist." "Jack Kemp knows I'm teed off at him," Reagan wrote in his diary after Kemp moved to block increased funding for the International Monetary Fund, which Kemp deemed excessively statist. On foreign policy, too, Kemp consistently out-Reaganed Reagan. "Jack Kemp kicked up a fuss," Reagan complained to his diary after Kemp argued in a White House meeting that aid to anti-Communist rebel forces in Angola ought to be overt rather than covert. Kemp further irritated Reagan by calling repeatedly for the removal of Secretary of State George Shultz and Federal Reserve Board Chairman Paul Volcker. None of that might have mattered - indeed, given that Bush was pegged early in the race as a "lap dog" and a "wimp," it might have helped - had Kemp succeeded in establishing a public profile that extended beyond the political class. But he hadn't. Among Republican candidates, Kemp was more sought after to speak than any politician except Reagan himself. He had a winning personal style - optimistic, more enthusiastic than a golden retriever and not particularly interested in (or good at playing) political games. But among ordinary voters, Kemp was not well known; as a mere House member, he had name recognition of about 25 percent. That put him behind not only Bush and Bob Dole (the party's vice-presidential nominee a dozen years earlier) but also the popular televangelist Pat Robertson, who jumped into the race unexpectedly, upsetting Kemp's strategy to capture the party's right flank. After poor showings in Iowa and New Hampshire, and on a 17-primary Super Tuesday, Kemp dropped out. In retrospect, the biggest political mistake of Kemp's career was not to challenge Senator Jacob Javits in the 1980 Republican primary after Javits was found to have Lou Gehrig's disease. Characteristically, Kemp didn't have the stomach to kick Javits when he was down. Alfonse D'Amato, a Long Island county supervisor, bore no such misgivings, and won both the primary and the Senate seat. Staying out of the 1980 primary was, Kondracke and Barnes write, "the single most agonizing political decision Kemp ever made," and it may have cost him the presidency. KEMP'S NEXT ACT was as secretary of health and human services under Bush père, where he moved swiftly and, by all accounts, effectively to clean up the mess left behind by Samuel Pierce, who had run the department indifferently, allowing it to become engulfed in scandal. Kemp raised the department's profile and used it as a bully pulpit to evangelize about fighting poverty. The job was a good fit. As a onetime professional athlete, Kemp felt more at ease in the company of African-Americans than most Republicans; and as a devout follower of the Austrian school of laissez-faire economics, he believed that you could eliminate poverty by establishing the right financial incentives. Kemp was also much more resistant than most Republicans to cutting government benefits (or indeed, government spending in general), insisting that economic growth fueled by tax cuts was the best way to eliminate deficits. Some of that resistance came from Kemp's experience meeting with the dispossessed and developing an understanding of what their lives were like. I covered Kemp during this period as a reporter for The Wall Street Journal and became convinced that his concern for the poor was sincere. Unfortunately, Kemp's favored solution was to turn public housing over to individual residents, who through the very act of becoming homeowners would become more economically productive, and therefore able to meet monthly mortgage payments. Supply-side homeownership proved no more realistic than supply-side tax cuts. Bush didn't really buy it, and his budget director, Richard Darman, kept Kemp on a very short leash. On Kemp's watch the poverty rate rose from 13 percent to nearly 15 percent. Kemp's final act was as vice-presidential candidate to Bob Dole in 1996. The two had been ideological enemies in Congress because Dole favored spending cuts over tax cuts. ("The good news is that a bus loaded with supply-siders went over a cliff," Dole once joked. "The bad news is that there were three empty seats.") But Kemp was not one to hold grudges, a spot on the ticket was a path to the presidency, and anyway, Dole was running this time as a supply-sider, even going so far as to recite his party's by-now obligatory catechism that "tax cuts, by stimulating growth, bring in more revenue." Even so, the partnership functioned poorly, in large part because Kemp declined to perform his designated role as attack dog. "Bob Dole and myself do not see Al Gore and Bill Clinton as our enemy," Kemp said at the vice-presidential debate, as Dole, watching on television, fumed. The ticket lost, with 41 percent of the popular vote to Bill Clinton's 49 percent. Kondracke and Barnes wrote "Jack Kemp," they say, because they want contemporary Republicans to emulate his commitment to supply-side economics (a "revolution that changed America and the world and altered history") while preaching inclusiveness and avoiding the vicious partisanship that characterizes Congress today. As regards the first, Kondracke and Barnes have little to fear; despite its consistent record of failure under Reagan and President George W. Bush, supply-side economics remains the Republicans' unquestioned faith. The authors are right that it would be refreshing to see Republican candidates adopt Kemp's happy-warrior style. But will ambitious young conservatives who read this book really take away that lesson? Kemp was a good man with some deeply felt convictions who could never vault himself to the top. A big reason, Kondracke and Barnes make clear, is that he lacked a killer instinct. Another way of putting that is to say nice guys finish last. Kemp was more resistant than most Republicans to cutting government benefits. TIMOTHY NOAH is the labor policy editor for Politico and author of "The Great Divergence: America's Growing Inequality Crisis and What We Can Do About It."
Copyright (c) The New York Times Company [October 11, 2015]
Review by New York Times Review