Jude Wanniski was one of the most interesting and original thinkers of the supply side revolution. As one of the main pall bearers of Keynesian economics, it was he who most promoted and indeed coined the term "supply side economics" in 1976 as an editor of the Wall Street Journal editorial page. Wanniski was an adviser to President Reagan from 1978 to 1981, and helped design the tax cuts that propelled the U.S. economy out of stagflation and led to the great boom that followed.

Wanniski's seminal book The Way The World Works, was named one of the 100 most influential books of the 20th century by the editors of the National Review. His other great contribution was his seminal work studying the stock market of 1929. It was Wanniski who discovered that the crash started the day after news that the coalition to block Smoot-Hawley, the confiscatory tariff which was to gut world trade, had fallen apart. Until his work economists had not seen the connection because Smoot Hawley was passed after the crash started.

For me it was his classic book, THE WAY THE WORLD WORKS, which reformed a whole generation of thinking about the 3rd world. I had lived in those nations, studied economics, read news reports, yet until Wanniski no one wrote about marginal tax rates such as 60% on over $3,000 per year in Bangladesh. Billions and billions of foreign aid was squandered by Washington, while no one studied or focused upon the brutal tax rates which confiscated capital and drove business into the underground economy. The book detailed incredibly high marginal rates in many nations. No one until Wanniski explained how South Vietnam had a marginal rate of 70% on $5,000 income when it fell, a major reason its economy was in shambles.

Wanniski researched how these rates came about. His book quotes how the great Swedish economist, Gunnar Myrdal, an icon of the liberal establishment in those days, wrote how high rates were set by European colonial authorities on purpose to keep local industries from becoming too competitive with their home industries. Local socialists than obligingly continued with high tax rates, once they gained independence. My own observation as a long time journalist about Latin America was that U.S. advice was all based upon what "worked" with the American depression and later the Marshall Plan in Europe. It was totally irrelevant, indeed very destructive, for 3rd world nations. Wanniski's book broke through this destructiveness.

After his book there was a sea change in 3rd world nations, cutting tax rates to allow economic growth and greater prosperity. Latin American nations consequently cut marginal rates to an average 30%, while Asian nations took off with really low rates. Wanniski also ran an on line SUPPLY SIDE UNIVERSITY. I had the privilege to know him and correspond with him often as he was also a strong opponent of the war on Iraq.

Those who would like to share remembrances of Jude and express condolences to his family are welcome to do so by email at webmaster@polyconomics.com.

Source: Wanniski.com