Did liberal Slate Group editor-in-chief Jacob Weisberg implicitly admit in a recent article that he buys into the tenets of supply side economics?
In Weisberg’s profile of Republican presidential contender Jon Huntsman in the August issue of Vogue magazine, he writes of the former Utah governor’s record:
“In office, he took progressive stands on immigration and the environment, signing on to a Western-states agreement to reduce carbon emissions. His big emphasis was on economic growth and job creation. Cutting the state income tax from 7 to 5 percent helped fuel business investment that by 2007 brought Utah’s jobless rate down to 2.3 percent—the lowest in its history. The resulting bonanza in revenue allowed the state not only to avoid spending cuts but to make investments, such as raising pay to attract better teachers.” (Bolding added.)
One of the key tenets of supply side economics, sometimes referred to as Reaganomics, is that by lowering taxes, the government can actually increase revenues by expanding the economy. This economic notion is regularly derided by those on the left. The debate was summarized well in a recent article on Slate.com.
“Since even before Arthur Laffer drew his curve on a napkin, Republicans and Democrats have been having the same fight about taxes and growth,” Annie Lowrey wrote. “Republican politicians insist that tax cuts ‘pay for themselves,’ increasing receipts by goosing economic growth. Democrats and virtually all economists say they’re wrong.”
From Weisberg’s Vogue passage, however, it appears that the Slate editor is placing himself with the supply-siders, at the very least at the state level. But when contacted by The Daily Caller, Weisberg said that wasn’t the case and that the situation in Utah was more “complicated.”
“They did tax reform in Utah is my understanding,” he said. “I think what you just read says that that was one of the factors that, you know, promoted growth and lowered unemployment. I mean, that’s what I would call that Keynesian economics, the idea when the government puts more money into the economy — whether through spending or by lowering taxes — it boosts aggregate demand and hence boosts revenue.”
“But, I mean, there was a hell of a lot going on there,” he added. “They had a big immigration boom, you know, they have a kind of economic boom going on. At the same time, I mean, I don’t think anybody, you know, I don’t think Jude Wanniski himself if he were resurrected would attribute the economic boom in Utah exclusively or mainly to the relatively small tax cuts.”
Despite clearly stating in the Vogue article that Huntsman’s tax cuts were the catalyst for the “bonanza in revenue” that “allowed the state not only to avoid spending cuts but to make investments,” Weisberg said he fundamentally doesn’t believe “that tax cuts actually pay for themselves” and “that government can lower rates and produce more revenue.”
“The claim of supply side economics is that tax cuts actually pay for themselves, the government can lower rates and produce more revenue,” he said, “and I don’t believe that to be true and I certainly don’t believe that Utah or Huntsman is remotely an example of that.”