The Real Job Creators

It's still behind a paywall for the time being, but if you have a National Review account, check out Henry Olsen's very important new article on the brewing conflict over “supply side” economic orthodoxy in the GOP. The article is a hot potato and I don't doubt it will cause a stir, so don't be surprised if it comes out from behind the wall this week.

Olsen notes that while Sam Brownback has slashed Kansas taxes for the very richest and seen little beneficial result, economically or politically, Scott Walker has pursued broad-based tax relief and succeeded on both counts. The political benefits have come not only because Wisconsin has seen more growth but because of the more democratic and republican political morality Walker's policy represents:

Walker’s tax policy helps address the GOP’s biggest weakness, the perception that it is the party of the rich and doesn’t “care about people like me.” Polls since 2012 have consistently shown that Americans think the economy is unfairly tilted toward the rich and that the Republicans are the party of the rich. A tax policy that essentially says America isn’t doing enough for rich people is unlikely to help the GOP nominee in 2016.

Romney lost because Obama beat him by 63 points among the fifth of Americans who thought the most important characteristic in a president was that he “cares about people like me.” Romney’s problem was even greater in Wisconsin. He lost by 74 points the nearly one-quarter of Wisconsinites who held that belief.

It should be noted that Olsen is using “supply side” in its original sense. Over the past generation “supply side economics” has become an epithet used to cast scorn and derision upon any policy that doesn't look to Big Government as a driver of economic growth. The question Olsen considers is not whether our hideously high taxes need to be cut, but whether or not tax cuts should be targeted to the very richest people. Supply side orthodoxy in the original sense of that term says yes; the rich have more economic impact, so cutting their taxes creates more growth. Olsen's (and Walker's) heresy is to favor cutting everyone's taxes, and even weighting the cuts toward the middle and/or the bottom rather than the top.

While there are important policy questions in play, Olsen gets at what is really the heart of the issue when comparing the rhetoric of the orthodox supply siders and the heretics. By contrast with today's orthodox supply siders, like Romney, who talk only about the tiny minority of rich people they recognize as “job creators,” Olsen holds up a passage from Reagan's first inaugural:

We have every right to dream heroic dreams. Those who say that we’re in a time when there are not heroes, they just don’t know where to look. You can see heroes every day going in and out of factory gates. Others, a handful in number, produce enough food to feed all of us and then the world beyond. You meet heroes across a counter, and they’re on both sides of that counter. There are entrepreneurs with faith in themselves and faith in an idea who create new jobs, new wealth, and opportunity. They’re individuals and families whose taxes support the government and whose voluntary gifts support church, charity, culture, art, and education. Their patriotism is quiet, but deep. Their values sustain our national life.

Now, I have used the words “they” and “their” in speaking of these heroes. I could say “you” and “your,” because I’m addressing the heroes of whom I speak—you, the citizens of this blessed land.

This is, according to Olsen, the only time Reagan even used the word “entrepreneur” between 1979 and the signing of his tax cut bill in 1981. Today, we on the right rarely talk about anyone else. We are all job creators, and the American people are an entrepreneurial people.

Greg Forster is the author of six books and the co-editor of three books, including John Rawls and Christian Social Engagement: Justice as Unfairness.