The crazy aunt in the GOP’s attic

THE INTELLECTUAL crank is a familiar character. He produces lengthy manifestos explaining the world according to some completely novel and intricate theory, and claims to have completely overturned settled thinking on one or many subjects. He is almost invariably a loon.

Jude Wanniski, who passed away this week, was a crank. The difference between him and the overwhelming majority of cranks is that Wanniski’s crankery caught on.

Wanniski’s idea is called supply-side economics. Before Wanniski came along, mainstream economics held, and continues to hold, that the economy is a fairly complicated thing and that numerous factors affect its growth. Wanniski argued that the economy is driven almost entirely by people’s incentive to get rich, which in turn is primarily determined by their tax rate. Cut taxes, especially for the rich, and incalculable prosperity will follow. Supply-siders, unlike traditional conservatives, consider deficits unimportant.

Wanniski had no formal economics training. He helped devise and propagate this theory while working as an editorial writer for the Wall Street Journal. It was a classic, nutty, single-factor-to-explain-everything theory. In “The Way the World Works: How Economies Fail -- and Succeed,” his seminal exegesis of supply-side economics, Wanniski interpreted literally all of human development as a response to tax rates.

In one passage, for instance, he wrote that Adolf Hitler “left tax rates where he found them,” leading to “an explosive problem that Hitler sought to solve through Lebensraum, or conquest.”

Why, then, did this utterly implausible theory take off? A few reasons:

First, at the time (the early to mid-1970s), the economy was bad, and people were desperate enough to take a flier on something new. Second, Republicans felt their traditional aversion to deficits was a tough sell politically and found a theory justifying massive fiscal profligacy appealing. Third, the notion of offering huge tax breaks to extremely rich people had a particular appeal to, well, extremely rich people, who tend to wield a lot of influence.

The most famous claim of supply-side economics is that tax cuts can create so much growth that they pay for themselves. Mainstream economists do not believe this is true, at least not in conditions anything like those found in contemporary America. Among leading Republicans, though, it’s dogma. President Bush and his aides regularly say things like -- to offer up just one example -- “the deficit would have been bigger without the tax-relief package.”

Many of the Republicans who embraced supply-side economics did so out of rank cynicism. Irving Kristol, for instance, who published Wanniski in his journal and arranged funding for his book, later confessed, “I was not certain of its economic merits but quickly saw its political possibilities” and that “political effectiveness was the priority, not the accounting deficiencies of government.”

But there was not an iota of cynicism in Wanniski himself. Like any true crank, he genuinely believed that his theory held out the hope for human salvation. He promoted it tirelessly, at one point even risking his job to hand out leaflets at a train station on behalf of a pro-supply-side candidate.

Also like many cranks, though, his nuttiness was not confined to a single subject. He went on to compare Slobodan Milosevic to Abraham Lincoln, defended Louis Farrakhan, and he insisted that Saddam Hussein never used chemical weapons against the Kurds. A more cunning operator would have recognized that these nutty views were highly unpopular among his party’s leadership and would have stuck to promoting his more socially acceptable nutty views.

Wanniski was too honest to do that. And so he became the crazy aunt in the GOP’s attic. In the last decade of his life, few conservatives wanted to have anything to do with him, lest they admit the influence he had over their thinking. He was a better person than most of those he inspired.