Fun With Greg Mankiw

On "Supply Side" Tax Cuts:

What has infuriated some advocates of Mr. Bush's tax-cutting plans are things that Mr. Mankiw wrote in his textbook, "Principles of Economics," first published in the late 1990's.

The textbook includes a section on President Reagan's economic policies, which, like those of President Bush, called for deep tax cuts and were based in part on the idea that tax cuts could help pay for themselves by producing faster economic growth.

In a section of his book entitled "Charlatans and Cranks," Mr. Mankiw ridiculed the Reagan policies as "fad economics" that were tantamount to "fad diets."

"An example of fad economics occurred in 1980," Mr. Mankiw wrote, "when a small group of economists advised presidential candidate Ronald Reagan that an across-the-board cut in income tax rates would raise revenue."

After reviewing the impact of Mr. Reagan's policies, which included a run of high budget deficits that lasted until the mid-1990's, Mr. Mankiw wrote that the moral of the experience was that "when politicians rely on the advice of charlatans and cranks, they rarely get the desirable results they anticipate."

In later editions of his textbook, Mr. Mankiw dropped the entire section on "charlatans and cranks" and muted his criticism. But he has not mended his fences with today's advocates of big new tax cuts.

"These insulting passages display an enormous level of ignorance about the economic reality of the 1980's," said Stephen Moore, president of the Club for Growth, a
political group in Virginia that raises money for candidates who support Reagan-style tax cuts.

Mr. Moore said he wrote a letter pleading against Mr. Mankiw's nomination to Karl Rove, President Bush's top political adviser. But White House officials, who are still angry about Mr. Moore's complaints about Stephen Friedman, said today that they did not listen much to Mr. Moore.