The Washington Times
Back in early 1981, when I went to Washington to work for President Reagan, one of the architects of supply-side economics, Columbia University’s Robert Mundell, visited my Office of Management and Budget OMB office inside the White House complex. At the time, we suffered from double-digit inflation, sky-high interest rates, a long economic downturn and a near 15-year bear market in stocks.
So I asked Professor Mundell, who later won a Nobel Prize in economics, whether Reagan’s supply-side tax cuts would be sufficient to cure the economy. The professor answered that during periods of crisis, sometimes you have to be a supply-sider (tax rates), sometimes a monetarist (Fed money supply) and sometimes a Keynesian (federal deficits).
I’ve never forgotten that advice. Mr. Mundell was saying: Choose the best policies as put forth by the great economic philosophers without being too rigid.
Of course, John Maynard Keynes was a deficit spender during the Depression. Milton Friedman warned of printing too much or too little money. And Mr. Mundell, along with Art Laffer, Jack Kemp and others….