Exclusive Interview
George Gilder on Austrian Finance, Internet Technology and the Virtues of Supply-Side Economics
The Daily Bell is pleased to present an exclusive interview with George Gilder (left).
Introduction: George Gilder is Chairman of George Gilder Fund Management, LLC and host of the Gilder Telecosm Forum. He is also a Senior Fellow at Discovery Institute where he directs Discovery's program on high technology and public policy, and the former Editor in Chief of the Gilder Technology Report (published by Forbes Inc., 1996-2007). Mr. Gilder pioneered the formulation of supply-side economics when he served as Chairman of the Lehrman Institute's Economic Roundtable, as Program Director for the Manhattan Institute, and as a frequent contributor to A.B. Laffer's economic reports and the editorial page of The Wall Street Journal. In the 1980s he also consulted leaders of America's high technology businesses. According to a study of presidential speeches, Mr. Gilder was President Reagan's most frequently quoted living author. In 1986, President Reagan gave George Gilder the White House Award for Entrepreneurial Excellence. Mr. Gilder hosts the web's premier technology investment discussion forum, the Gilder Telecosm Forum, and co-hosts (with Steve Forbes) the annual Gilder/Forbes Telecosm Conference.
Daily Bell: Can you give us some background on your life – where you grew up and what your interests were?
George Gilder: I grew up on a dairy farm in the Berkshires in Western Massachusetts, where my prime interests were cows, birds, sports, and girls.
Daily Bell: How did you become involved in free-market thinking?
George Gilder: I didn't. I got interested in human creativity and the conditions that foster it. It is enterprise that causes free markets, not free markets that summon enterprise. Adam Smith was wrong in his assertion that the extent of the division of labor is determined by the extent of the market. It is the other way around. The extent of the division of labor – the creativity of entrepreneurs – determines the extent of the market.
Daily Bell: Who were your big influences?
George Gilder: Jean Baptiste Say of Say's Law – supply creates its own demand – introduced to me by Thomas Sowell, who devoted his thesis to the subject. Supply-side economics is not a mere elaboration of free market theory. It is a new theory, founded by Say. It says markets are mere effects of enterprise.
Now from my studies of communications technology and Claude Shannon, I am intrigued with information theory and its concept of information entropy, which registers unexpected bits. Creativity always comes as a surprise to us. No information is transmitted unless it is unexpected. In this sense, Entropy is another word for "news."
I believe that information entropy also represents entrepreneurial "profit" (the unexpected component of returns; the expected component is the interest rate). Entrepreneurial economics is the economics of entropy. My former colleague Bret Swanson has an excellent website www.EntropyEconomics.com.
The key rule of information theory is that it takes a low entropy carrier (no surprises) to bear high entropy information. That is why information gravitates to the electromagnetic spectrum, with its predictable waves guaranteed by the speed of light. And that is why creative enterprise gravitates to countries with stable currencies attuned to gold and the rule of law (no surprises).
Daily Bell: Explain your views on feminism and affirmative action as a young man.
George Gilder: I always valued the differences between the sexes as crucial to life and love.
Daily Bell: Have your views evolved since then?
George Gilder: Just grown stronger as the evidence from biology has mounted.
Daily Bell: Do you see differences between the Austrians like FA Hayek and the Fresh Water school of Milton Friedman?
George Gilder: Yes. The Austrians stress entrepreneurial creativity over free markets. When I went to China in the 1990s with Milton Friedman, he urged the Chinese to "take control over their money supply" as if the communists needed any further recommendations for "controls." I urged them to "let a billion flowers bloom." As I have said, there can be no free markets without free entrepreneurs. Entrepreneurs are not tools of the market, they are creators of new tools. The entrepreneur precedes the market. Without him, there is no market. The computerized markets of the quants careened to a predictable crash.
Daily Bell: Did you at the time you were writing Wealth and Poverty, a great book in our opinion.
George Gilder: Yes, I always preferred the Austrians for their stress on entrepreneurial creativity, but even the Austrians, beyond Von Mises, fell for the temptation of seeing entrepreneurs as products of "the free market" rather than its creator.
Daily Bell: Would you define yourself today – Republican, Conservative, Libertarian?
George Gilder: Yes.
Daily Bell: What do you think of the growing movement of Austrian economics?
George Gilder: Ever since Ludwig von Mises, the Austrians have been supreme in economics. But as far as I know no one has excelled the master.
Daily Bell: What do you think of Murray Rothbard?
George Gilder: Murray always struck me as a brilliant dogmatist, letting the ideal always trump the possible advance and allowing his hatred of bureaucracy to blur his ability to distinguish between totalitarianism and mere political muddle, between the Soviet Union and the United States, for relevant examples.
Daily Bell: What do you think of the Internet?
George Gilder: I have written several books on the Internet, beginning with Life After Television in 1990, which predicted "worldwide webs of glass and light." I think the Internet is now close to the end, because TCP-IP has become a cumbersome obstacle to communications in an age when video is the dominant form of traffic and thus the governing determinant of optimal technology. The new network will resemble a broadband synchronous version of the old telephone network, optimized for video. The current Internet, as Henry Gau has said, resembles an old telegraph system patched and upgraded for video.
Daily Bell: Is the Internet a force for freedom?
George Gilder: Yes. Communication is a form of freedom.
Daily Bell: How has your opinion of technology evolved over the years?
George Gilder: I have strengthened my view that government financed science and technology (such as global warming or "alternative" energy) are nearly always reactionary.
Daily Bell: Why did you stop writing about free-markets when you were such an eloquent proponent? Your voice has been missed.
George Gilder: I never stopped, but I wrote more about the fruits of enterprise and creativity than about the perfection of "free markets" themselves. Like "perfect competition," a cant of "free markets" has become an excuse for oppressive regulations and controls. As markets are never finally free or competition ever perfect, critics can always find reasons for new beadles and bureaucrats. Ostensible advocates of free markets, such as Paul Romer, end up denying the existence of real entrepreneurial invention (de novo) by depicting it as the mere materialist "reassembly of chemical elements."
Even Austrians depict the entrepreneur as a mere "scout of opportunities" or "arbitrageur" rather than as a creator of radical novelties based on imagination and original inspiration. They see the entrepreneur as a tool of markets rather than a creator of markets. Creation is a real thing in the world. Treating it as some kind of material process is arrant reductionism which leads to the notion that computer based financial markets are ideal. As we have seen in the recent financial crash, markets cannot function without human creativity and judgment.
Daily Bell: What do you think technology is capable of?
George Gilder: Empowerment of capitalists to defend themselves without retreat to Galt's Gulch.
Daily Bell: How is it going to change the future?
George Gilder: Enable global individualism and enterprise.
Daily Bell: Will it have a political impact? Is it?
George Gilder: Technological progress renders totalitarianism impotent. Only freedom can enable innovation and empower progress. Despots impoverish themselves.
Daily Bell: Where do you stand on fiat money versus a gold and silver standard?
George Gilder: Although I do not believe a restoration of the old gold standard is possible or desirable, I believe that gold is the monetary element and provides an extremely valuable gauge of the appropriate monetary policy. Ignoring the price of gold is perilous for any nation, such as the U.S. Gold will prevail over blind monetarism.
Daily Bell: What do you think of Congressman Ron Paul?
George Gilder: Like many movement libertarians, he always prefers the quixotic ideal (radical spending cuts) to the feasible improvement of lower tax rates. By opposing defense spending and American power he has become a shill for the enemies of capitalism and freedom.
Daily Bell: What do you think of the Tea Party movement?
George Gilder: A fully beneficial force as long as they stress tax cuts rather than spending cuts. Lower tax rates are good in themselves. Lower spending always ends up focusing on defense.
The chief damage of the new health care "reform" will come from the 16,500 new Internal Revenue Service Agents, each with $600K, assigned to enforce it. To focus on spending is wrong. It is coercive taxation that is the problem. It destroys capitalism.
Daily Bell: What do you think of the European Union and the move toward globalism generally. A good thing?
George Gilder: Global capitalism is good. Global socialism and bureaucracy is evil.
Daily Bell: Is America in good shape these days? Are you encouraged or discouraged?
George Gilder: America is in relatively bad shape. But it is showing strong signs of a revulsion against the ascendant socialism.
Daily Bell: What are some of the most influential books and web sites you can recommend to our readers?
George Gilder: Panic: the betrayal of capitalism by Andrew Redleaf and Richard Vigilante is the definitive account of the financial crash. Bret Swanson's EntropyEconomics website is excellent.
Daily Bell: Please recommend further reading from your own oeuvre as well.
George Gilder: My new book, The Israel Test, explains how anti-Semitism and anti-Zionism are chiefly forms of anti-capitalism.
Daily Bell: Thank you for your time and insights.
George Gilder is a provocative writer with a formidable intellect. The arc of his literary career is broad and glittering, and his arrival on the national scene was a literary event. He was an original thinker from the beginning, attracting attention for his plain-speaking about male/female relationships and then, before it was fashionable, the necessity for free-markets in a Western world that was trending toward socialism. Many read his 1981 bestseller Wealth and Poverty and were favorably influenced by his arguments for freedom and free-markets. The book was timely and erudite – a pleasure to read. (One can see even from the interview above that George Gilder is an artist with words.)
Anyway, the whole idea of supply-side economics, which George Gilder helped pioneer as Chairman of the Lehrman Institute's Economic Roundtable, was a sociopolitical revelation. It could be realistically implemented and supported ideologically by US conservatives of the day. It also worked. In fact, every time taxes have been cut (in the U.S.) an energetic economy has been the result. By cutting taxes, a government can actually gain revenue – because entrepreneurs work harder – which is something the Obama administration should remember as it begins to arm revenue officers with rifles to facilitate further collections.
But the major point of enlightenment as regards this interview – from our viewpoint – is the statement made about libertarian congressman Ron Paul (R-Tex). Now from our point of view, Ron Paul is a man with a cast of mind similar to George Gilder's. Gilder, however, doesn't see it that way. He seems somewhat skeptical of Ron Paul.
"Like many movement libertarians, he always prefers the quixotic ideal (radical spending cuts) to the feasible improvement of lower tax rates," Gilder states in the interview above. And then he adds of Ron Paul, that, "by opposing defense spending and American power he has become a shill for the enemies of capitalism and freedom."
He also states in answer to the next question about the impact of the US Tea Party movement, "[They are] a fully beneficial force as long as they stress tax cuts rather than spending cuts. Lower tax rates are good in themselves. Lower spending always ends up focusing on defense."
We can see from the above perspective that George Gilder believes in a robust defense posture and an expenditure (one assumes from his answers) roughly analogous to trillions being spent now by the Pentagon. Not only that, but he seems to imply that the Reagan era focus on CUTTING TAXES versus CUTTING SPENDING was a purposeful one at the highest levels – a way of presenting one's free-market bona fides without chopping expenditures. In fact, Reagan ended up increasing government, which was certainly not his stated intention.
Now leaving aside the issue of military spending – a contentious one to be sure (given America's serial, global wars) – what George Gilder is telling us is that supply-side economics allowed the Reagan era Republican party to promote free-markets without running the danger of encouraging military spending cuts. In other words, government could continue to grow at the federal level even though it was implementing free-market solutions.
This is an astonishing perspective and one that we had not fully contemplated. Perhaps we've simply not read the right articles or books, but we've believed all along that supply-side economics was proposed as a libertarian solution to the problem of OUT OF CONTROL government. In fact, we are informed herein, it was proposed as a libertarian-style alternative that allowed government to CONTINUE to grow – or so George Gilder seems to explain. (Maybe we have missed something in our analysis or misunderstood him, in which case we apologize.)
Armed with acute insights, George Gilder makes other provocative statements in this interview, and we won't presume on the reader's time to point them out. They are evident enough and are cast forth as sparks, in our view, from a brilliant mind. He is certainly not a man equipped to endorse common wisdom, though his track record shows us that he is fully capable of anticipating society's most profound transformations.
Finally, we will not pretend that this interview reveals an entirely candid George Gilder. He was obviously somewhat guarded and occasionally monosyllabic, or nearly so. But we were pleased, nonetheless, to elicit his fascinating responses on any terms and wish to state he was most gracious to give us even a little of his valuable time.
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Posted by Banh on 07/01/10 11:35 AM
So, Ron Paul recommends that we discontinue our Roman or British Empire mentality and focus on our own security here at home. Is he wrong? Absolutely not. You guys live in Switzerland, correct? Do you have a tight border and a "ready to rumble" military, gun in every household? Yes you do... America is a big open porous sponge which is absorbing everyone else's problems through not paying attention to national security and operating in a "sovereign" manner. how much wasted money is spent in the world maintaining the "empire"? Does Mr. Gilder see this as constructive? We know the end result of "empires", don't we?
On money and taxes, if the Fed can increase the money supply by the click of a mouse, why does the population continue to be imprisoned by an income tax system? If the Fed and the government are playing with Monopoly money, as in the stimulus programs, why must we play the game of Life as if it's real money? Ron Paul is a smart man, and he knows corruption when he sees it.
The "inflation tax" increases every time the Fed screws with the interest rate and money supply. It is corrupt to the core. Mr. Ghandi saw the reality of corruption and government management of populations,, perhaps Ron Paul can do the same thing for my country. Corruption is corruption, no matter the perpetrator.
It would be very nice if someone in media would complete Ron Paul's thought process when quoting him.
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Posted by Curious on 04/29/10 12:02 PM
Small entrepeneurs like myself, who believe they can repeat the success we had in the 1990s, are finding the global markets much less receptive to American overtures.
In fact many of the people I talk to in Asia are blaming America for the financial crisis and don't want to buy my products. Thanks Wall Street. Thanks George Gilder. You should have kept your advice to yourself.
Reply from The Daily Bell
Sorry to hear it. Fiat-money investing always boils down to timing, it seems ...
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Posted by 404 on 04/25/10 12:05 PM
To make things worse, the cruel poverty from the South goes mainstream. Do a wrong move - and it will tear American families apart with fear in a wink of an eye. OMG, I understand Arizona. But noone can dig a hole and bury its head in - the age of firearms is now, is it not?
Well, I can explain/try to, why so many people try to judge the US. Well, JFK first, but there is another thing out. Those small boxes for posting (and, especially, Twitter 140 format) does not allow users say more about some other governments, which are in the same shite presently. So saying anything about the US will surely outline the problem enough universally (-;
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Posted by Dave on 04/24/10 07:33 PM
Yes the USA has become the supply side for all the moneied pimps, irregardless of if they carried std's and were not in the best interests of the people. Wall street and DC have become malignant tumors, exploiting peoples class, trust and nativity in order to rob, pillage and further a hidden agenda.
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Posted by 404 on 04/19/10 11:37 AM
- the collapse of the Soviet Union was caused by the policy which took start at Mr. Reagan's times;
- @ "the Soviet economy would have driven itself into a ditch in any case" - definitely so, with such selfish attitude of the likes of the Brezhnev's era' bureaucrats. And somehow more clear the reasons are when you let yourself suppose that Bureaucracy is internationally centered nowadays;
- the existence of the Soviet Union in the present state, in papers, was ended by unanimous decision of the responsible national leaders. So was a dangerous tendency escaped - involving the SU in war on its southern borders (Karabakh, Tajikistan, etc.) which situation was pumped in hope that the Int'l Community will restrict most of the life-important supplies during the Civil war, which was projected. So the leading role of RF came forth onto stage, instead of the Soviet driver.
In the case of emergency/treason in Moscow, St. Petersburg was to take its place in defining the policy and steps on the way to its achievement. No any extra ads and proclaiming new kings on the block was necessary. West swallowed the bait.''
As appears, it was done quite in time, for the SU. As far as I know, the WH was shocked when Mr. Gorbachev resigns. Then the WH got lonely, half-dressed drunk "Russian president" Yeltsin looking for a pizza in night American capital. Go on, talk about anything serious, gentlemen, with the first president of RF (-:
And there are persons who get their pension for this show, in those countries which leading teams were so tempted to enforce their part of the work on destruction of the SU.
Do you know what's the most funny here? Both parties are sure they getheir quids for a honestly done work.
Sometimes it's funny to read stories about the collapse of the SU. And, it's even funnier to hear any wise sentence or a hundred of them on the modern economy based on "contemporary banking values", because they are based on ignorance of the history and developments of delusional conclusions based on what the servicemen-on-retirement tell journos youngsters. I'd say it's an extremely stupid and dangerous affair. I'm afraid it will take some twenty-forty years for their mentors to clear the stage for a much more contemporary play in major tunes.
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Posted by David Widmer on 04/17/10 11:01 AM
Our government is spending us into oblivion. Fair Tax does not address the spending problem.Therefore we need to spend less, and, for what we DO spend, collect the (responsibly spent) funds as fairly and efficiently as possible, i.e., Fair Tax.
Maybe you could start a discussion on the Fair Tax sometime soon?Thank you. I sure appreciate the articles you send.
Reply from The Daily Bell
Thanks. Maybe you've started the discussion already.
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Posted by James on 04/16/10 04:24 AM
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Posted by The Gimlet Eye on 04/15/10 03:29 PM
I am convinced that the Soviet economy would have driven itself into a ditch in any case. That's what socialist economies do. They contain the seeds of their own destruction.
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Posted by 404 on 04/13/10 07:02 AM
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Posted by 404 on 04/13/10 03:02 AM
I'm taking my hat off my forehead before a father of four. And, once being a cowboy, you know what is Hollywood, right? These last two words "Hollywood" and "right" were sounding somehow novel being put together; if the Chairman Moderator finally allows to make it a straw in the flow, let's get it into hands, for a reason that sounds even more reasonable and easy to understand ... also long sentences might be interrupted by turning on Mostly Classical FM ... that this is just the very moment and the waters are too cold this season to let your hope last long.
The sacred-truth we know but have no reliable combination of letters to explain it is that the Hollywood-like (oh, and many other) media production have an additional effect of something (I will use this word for general understanding) pharaonical.
Moreover, as ancient as its origin, appearing on screen and presented by the pharos' priests, the output of Hollywood is firmly targeted to maintain the society of consumption. It's very important for an enterprise to grow and bring more wealth to the people, and the modern advantage of the technology, in which is Mr. Glider a recognized and respected specialist.
But there are buts upon the legs of this conclusion, and it takes a wink to rise an eye and see whose they are. As soon as Mr.Glider's article (what an excellent surname for a professional contactor) is dedicated to economics, I'd mention the fact of illegal privatisation of the so-called images of the so-called Book of Thoth, which is considered to be a truly economically efficient phylosophical production plant, which feeds itself with imagination of its operator by a Mutual Trust Agreement.
Of course I don't mean Mr. Glider operating here. I would just come further and say that the book is not learnt to interrupt the communication by its will, because it has no other autonomous energy vaults but those seven sealed by the Semits in the Bible, and it's now being full of mercy as of a most efficient way to mantain the economics with full compatibility with the Zen attitude**.
By cracking its code, the East, West, North and South gave some light into the vocal courtesy of each picture. And this is just what Mr. Glider is talking about by introducing an electromagnetic cloud here. Being endlessly thankful, it deprives the operator nearly all juices of life if he's long out of change.
Let's wind the tape forward, which is not quite scientifical, but appears to be shorter in text - the operator becomes a Beast out of the Sea. Fortunately, on this level of, hmm (-: the Game, the book breaks the contact, leaving some long inertia trace in a bound matter, to make things go round again with the help of the Third party, which situation is mentioned in the Agreement.
Change we can believe in - it must be said about the operator? The ropes once cut are tied by now, by the means of Internet... and Energetics, of course.
Mr. Glider, what about some 50 000 (which, as you may suppose, delivers many times more real wealth in the following circumstances) guaranteed to all who does not enterpreneur up to the socialising of over-five percent profit with 4-hrs 0-hrs dinner 4-days working schedule and lots of satisfying creativity in working, socialising and leisuring activity, in Austria, for the beginning.
The Agreement includes, people should not worry*. Change, for the book is presently operated by injecting false information considering the quantity and well-being of the population of the planet in the input line on the subconscious level. The operator finally appears truly and wholeheartedly believes that he is an Earthly elite NOT CONSIDERING humans those who is out of the so-called a Circle of the Chosen.
And here we might look at the Fool's Map card, and be again aware that there is nothing you can step into in the world of the bound matter. The crocodile and the dog, who show the imaginary direction where the visionary's heading his feet to, are having such appearance before a human to show the human one shouldn't be here having seen them in such appearance.
If the Fool's roadmap doesn't tell one well what to do - just move yourself away for some hundred years, keep the cloud clean. And with this is completed what I have said about Hollywood and Zionism and corruption. *And this is ommitted for the governed sheep's ear, which, sadly, ships the flock with more troubles and grief than this is necessary for the proper bringing up a young human. For instance, this was found using keywords
"Israeli Test": Click to view link
Reply from The Daily Bell
Thanks for the feedback and link. You are driving at something, though not sure what.
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Posted by Nanoo Visitor on 04/13/10 02:36 AM
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Posted by George Gilder on 04/12/10 10:07 AM
Murray Rothbard was a friend and I don't want to caricature his position. I did not want to imply that he supported the Soviet Union. But his titanic opprobrium for the U.S. "military-governmental complex" made it hard for listeners to recall his equally (or more) exhaustive contempt for the USSR (which he extenuated from time to time by alleged U.S. offenses).
He did prophetically predict the fall of socialism in the USSR. The issue is whether the Soviet Union would have collapsed without the pressure of Reagan's expansion of U.S. military power and anti-missile projects that Rothbard vehemently opposed.
Weakening Rothbard's position is the evidence from the Soviet leaders of the time, who attribute the Soviet collapse mostly to U.S. power and technological prowess. Without U.S. power, the positive sum gains of international trade and capitalism might well collapse amid zero sum statism and piracy as we saw before the first and second world wars.
In my view, many of the self-defeating excesses of U.S. diplomacy (war and nation building) in the Middle East stem from a failure simply to support Israel as the leading capitalist creator in the region and indispensable U.S. ally.
If we simply defended Israel as our proxy in the region, with as much power as needed, all the angles and intricacies of our operation in Afghanistan and Iraq, balancing among Sunni and Shiite, Kurd and Pashtun, and all the collateral damage, would be unnecessary.
The chief rule to be enforced would be protection of the territory of Israel as established in 1969. Israel has never sought any further territory and has no goals for its neighbors except the prosperity of mutual trade.
The existing Palestinian state is Jordan, which is already several times the size of Israel. When the U.S. attempts to engineer peace, we convey conditions on our support for Israel that are exploited by Jihadists and UN apparachiks. You cannot have a global economy without some form of defense of its necessary freedoms and free markets.
Supply creates its own demand within the precincts of low entropy carriers: predictable law and order and stable currencies.
Reply from The Daily Bell
We again thank Mr. Gilder for his followup. It has been a most interesting and insightful dialogue.
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Posted by AmanfromMars on 04/12/10 05:37 AM
[re .... Posted by Geopark (George Parkington on 4/11/2010 2:13:21 PM]"
The comments section is often as provocative as the interview and I wish that you would allow it to become more of a forum."Thanks. Patience.[/quote]
Forums have their own particular dynamic and pitfalls to negotiate/consider and really, unless contributions are instantly available for comment and viewing unmoderated, which of course is the usual norm in freely available Open Source Software products, is it rendered a virtual mine field. This article and its comments thread gives a taster of what is to be expected .........
Click to view link
To be honest, in the very perverse and subversive space of Internet Communications, the Daily Bell's approach/Modus Operandi allows for both outrageously innovative and creative thought provoking dialogue/Virtual Conversation and a remote executive administrative control of message, which is more about ensuring a consistently higher standard of content rather than assuming it is also or only about subjective vetting content message to reflect a In House Policy with a Politically or Financially Motivated Bias towards a Particular Agenda, is very hard to beat and better.
There is always the need for someone/something to be the Exercise of Absolute Control, but it should also be realised that whenever Control is not an equitable one, will it be unfit for future purpose and derivatives of that purpose, and will its controllers be sought out for the supply of a changed algorithm and/or program to remedy the situation, by those who would have such programs/algorithms.
Such would certainly be of great benefit to "a handful of powerful people have constructed a system that swaps electrons for gold and pretends that paper has value." as identified by the Daily bell here .....
Click to view link
Strangely enough, it may very well be the case, that even the most objective of free speech sharing agendas, is itself a very subjective bias.
Reply from The Daily Bell
Good points. But please make your sentences shorter. Use periods.
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Posted by Spectator on 04/12/10 05:13 AM
What utter nonsense. Gilder has always displayed this unfortunate philo-semitic blind spot. He ignores Israeli oppression of the Palestinians, Jewish financial manipulation, Jewish drive towards monopoly over information sources. In other words, actual Jewish actions.
He then conveniently joins the ADL and other "Jewish defense" organs in trying to change the subject to the attitudes of those making the charges. Nice work if you can get away with it. Increasingly, he cannot get away with it.
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Posted by Terrymac on 04/12/10 03:55 AM
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Posted by BILL on 04/11/10 11:56 PM
Read THE TRUTH ABOUT SUPPLY SIDE ECONOMICS BY Michael K. Evans. He wrote it after its failed application by Reagan. He states that " Judged by any reasonably unbiased criteria, including the administration's own forecast, the program as actually implemented was an egregious failure."
The failure was tied to Reagan's massive tax cuts along with his massive military spending and the FED's contracting money supply and raising interest rates. In theory it sounds plausible but certain factors have to be in place which is why the Kennedy tax cut worked.
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Posted by David Widmer on 04/11/10 10:30 PM
What I would like to know is this: Of the many Daily Bell newsletters I have studied, I don't recall any mention of the Fair Tax, which is a method of taxation touted to be more efficient and FAIR compared to the terrible present Tax Code of the IRS.
Would you be planning any discussion on the Fair Tax in the future? From all I have studied, it appears to be a system of taxation whose time has come. What opposing positions are there, if any? I, for one, would welcome its enactment into law!I await your response.
Reply from The Daily Bell
It's just another tax. The idea is to roll back taxes if possible. There are analyses that indicate it could be abused just as every other tax is abused.
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Posted by Weeble54321 on 04/11/10 09:38 PM
When a person wants to trade something of value with another person, it is done at arms length with no coersion. If someone wants to give me a pretty piece of paper for my trade, the only reason I take it, is due to "credit". The "belief" that this piece of paper has value.
The only reason it works is that everyone else believes in it, so I can then trade it for something of value to me (like food, cothing, shelter or an ipad). A credit based world is for the parasites that have nothing of value to offer. They take and do not give. They inflate and steal. They plan our lives and we suffer the effects of their bad planning. They attack when they say they are defending.
Please do not try to cloud the issue with a shell game of words defending government's immoral purpose. This depression pain will go away when we have have a world SDR reserve currency (which you seem to want) and the credit starts flowing again. It's like the League of Nations WW1 and the UN WW2 all over again. SDR WW3.If you agreed with Human Action, then why are you stomping on it?
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Posted by George Gilder on 04/11/10 08:30 PM
I welcome the recommendation to reread yet another time the Von Mises masterpiece Human Action, which shaped many of my views, and other works by Von Mises that informed my theories on the role of Jews in the development of entrepreneurial capitalism, particularly in Austria.
I do wish to correct the impression that I favor increased government spending. I favor a remorseless reduction in government spending as a share of total output. I believe that this goal can best be achieved through lowering tax rates.
If revenues are increasing after a tax rate reduction, the private sector must be expanding as a share of the total. I also believe, along with Steve Forbes, that regardless of government policies a major monetary role for gold is inevitable.
Along with Steve I believe in a low flat tax and in comprehensive programs of deregulation. I also am an admirer of Milton Friedman's Capitalism and Freedom and other incisive works, though I do not accept his monetary theory except as a truism (I have to confess that in defending his ideas in China he talked circles around me and taught me much).
I particularly valued his insight that he would prefer a large deficit with a low tax rate over a small deficit with a high tax rate, although I prefer to add that a low deficit is far more likely with a low rate than with a high one that stifles enterprise.
I must admit I find obnoxious the slurs against Israel, which under supply sider and libertarian Benjamin Netanyahu is one of the most creative and entrepreneurial countries on the face of the earth despite occasional violations of free market perfection as it faces constant threats to its very existence from countries hugely larger.
I recommend The Israel Test to any of my readers who retain an open mind on this tiny country that supplies many of the world's most important new technologies and is rapidly transcending its socialist heritage.
Reply from The Daily Bell
We wish to thank Mr. Gilder once again for gracing our modest pages and - and now for correcting any misperception about his views regarding government spending. We look forward to reading his new book and hope to recommend it to our readers as well.
Copies can be purchased here ...
Click to view link
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Posted by Weeble54321 on 04/11/10 07:06 PM
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