The supply-siders build upon universally accepted phenomena, but then attribute wondrous powers to them, well beyond what an informed person could imagine. For example, lowering taxes can stimulate the economy, holding everything else equal, but the supply-siders assume that tax cuts and the elimination of regulation can make a paradise on earth.
The fact that the Bush administration is embracing these people should not be taken to be evidence of their credibility, but rather how ridiculous is the rationale of the Bush administration policies.
Ian Murray wrote:
> http://www.nytimes.com/2001/04/10/business/10SUPP.html?pagewanted=2
> Mr. Lindsey said neither he nor President Bush liked to identify themselves strictly
> as members of one school of economic thought. Supply-side economics is one of three
> main streams of economic thought, Mr. Lindsey added.
>
> Keynesian theory helps governments manage the short-term business cycle, he said.
> Monetarism describes the proper role for the Federal Reserve in setting policy. And
> supply-side theory allows policy makers to think about how to enhance long-term
> growth.
>
> Because the president was a business executive for many years, Mr. Lindsey said, "I
> think he is most comfortable with the third."
> [snip]
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Michael Perelman Economics Department California State University michael at ecst.csuchico.edu Chico, CA 95929 530-898-5321 fax 530-898-5901