Arthur Laffer and Kennedy’s Rising Tide
President Reagan’s guru Arthur Laffer continues to preach the gospel of supply-side economics. Unabashed by the slight financial glitches in the wake of eight years of Reaganomics Redux under Bush, Laffer insists that it is not too much reduction of taxes on the rich that has contributed to our current problems, but not enough. He also continues to invoke President John F. Kennedy as an advocate of enabling the rich to get richer without limits, as in the following passage from an October 2007 paper posted by National Review:
My dream has always been to make the poor richer, not to make the rich poorer. And, in fact, it is an added bonus if the rich get richer while the poor get richer, as well. My favorite quote on this subject is from President John F. Kennedy who said: “No American is ever made better off by pulling a fellow American down, and every American is made better off whenever any one of us is made better off. A rising tide raises all boats.”
Laffer repeated the Kennedy quotation in his new book The End of Prosperity: How Higher Taxes Will Doom the Economy—If We Let It Happen, co-authored with Stephen Moore and Peter J. Tanous. In neither version, however, does Laffer provide a source for the quotation. In an Internet search I have found nothing on the first sentence. On the basis of what I have found, the famous rising tide metaphor appeared in two Kennedy speeches, neither of which had anything to do with wealth or taxation. One was a speech on August 17, 1962, in Pueblo, Colorado, on the Fryingpan-Arkansas Project, a TVA-like federal public works program of dams, reservoirs, and power plants. Kennedy said:
What I preach is the interdependence of the United States. We are not 50 countries—we are one country of 50 states and one people. And I believe that those programs which make life better for some of our people will make life better for all of our people. A rising tide lifts all the boats. And as Colorado moves ahead, as your steel mill produces, it is benefiting all the people, as they are benefiting you.
The second speech was occasioned by a similar public works project--“Remarks in Heber Springs, Arkansas, at the Dedication of Greers Ferry Dam,” October 3, 1963:
These projects produce wealth, they bring industry, they bring jobs, and the wealth they bring wealth to other sections of the United States. This State had about 200,000 cars in 1929. It has a million cars now. They weren't built in this State. They were built in Detroit. As this State's income rises, so does the income of Michigan. As the income of Michigan rises, so does the income of the United States. A rising tide lifts all the boats and as Arkansas becomes more prosperous so does the United States and as this section declines so does the United States. So I regard this as an investment by the people of the United States in the United States.
It is richly ironic that both of these speeches celebrated the kind of governmental pump-priming that are anathema to supply-siders like Laffer, and that the context of the rising tide metaphor is more socialistic than capitalistic. So if these are in fact the only occasions on which Kennedy used the phrase, Laffer, along with countless other conservatives who equate it with enabling the rich to get richer, would seem to be egregiously dishonest in twisting it into a rationalization for the skyrocketing disparity between the wealthiest individuals and everyone else in America over the past three decades. It is an Orwellian twist to suggest that even the most modest curb on the growing rate of disparity (such as raising the top income tax rate--presently half of Kennedy’s 70%--by 5% as Obama proposes) amounts to “pulling a fellow American down.”
A reasonable case can be made that Kennedy’s tax cut, from 91% to 70%, moved in the direction of Reaganomics, but this case is not enhanced by Laffer’s apparent misappropriation, and possible fabrication, of quotations from Kennedy. Can Kennedy historians provide further illumination here?
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