President Reagan’s guru Arthur Laffer, a former economics professor at the University of Chicago, continues to preach the gospel of supply-side economics. Undaunted 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. In an article posted by National Review in October 2007, largely re-iterated in his 2008 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, Laffer marshals data that he proclaims, “portray a picture of unprecedented prosperity for this wonderful country of ours. Take the time to contemplate each of these indicators of U.S. welfare and just how pervasive the effects are—how deep they penetrate into each and every one of our fellow citizens’ lives. The prosperity of the past quarter century is amazing and, in my view, it is a direct consequence of bipartisan supply-side economics.”
Laffer also invokes President John F. Kennedy as an advocate of enabling the rich to get richer without limits, as in the following passage:
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 uses the Kennedy quotation in both his article and book, but in neither version does he provide a source for the quotation, except for a footnote reference to one of his own earlier articles. I emailed him last December asking him if he could provide the original source. He replied that he did not have a citation, though he has used the quotation for years. He added that he didn’t have the time or inclination to search through his records, but that the quotation was used by candidate Reagan in the 1980 presidential race. Well, the fact that Laffer has used it for years doesn’t prove much, nor does its undocumented use by Reagan, the great fabricator of quotations, facts, and figures.
The “rising tide” metaphor has become a mainstay of Republican supply-siders, who endlessly attribute it to Kennedy in connection with his cutting of the highest income tax rate from over 90% to 70%, so I became curious to find where Kennedy used it, and whether in conjunction with the first sentence Laffer attributes to him. After an extensive library and Internet search (including the data bases of the Kennedy Library and the University of Santa Barbara’s American Presidency Project), I have found nothing whatsoever on the first sentence. On the basis of what I have found, the famous rising tide metaphor appeared in many Kennedy speeches-- none of which had anything to do with individual wealth or tax rates, and most of which had a quite different context.
One was a speech by then-Senator Kennedy in Cheyenne, Wyoming, September 23, 1960:
We are going to have over 300 million people living in this country in the year 2000. Many of them will live in this state. We are going to have to make sure that we pass on to our children a country which is using natural resources given to us by the Lord to the maximum; that every drop of water that flows to the ocean first serves a useful and beneficial purpose; that the resources of the land are used, whether it is agriculture or whether it is oil or minerals; that we move ahead here in the West and move ahead here in the United States. I think that there is a direct relationship between the policy of no new starts in developing our water and power resources, and irrigation and reclamation and conservation, and the fact that our agricultural income has dropped so sharply in the United States in recent years, and the fact that we are using our steel capacity 50 per cent of capacity. Pittsburgh, Wyoming, Montana, Wisconsin are all tied together. A rising tide lifts all the boats. If we are moving ahead here in the West, if we are moving ahead in agriculture, if we are moving ahead in industry, if we have an administration that looks ahead, then the country prospers. But if one section of the country is strangled, if one section of the country is standing still, then sooner or later a dropping tide drops all the boats, whether the boats are in Boston or whether they are in this community.
Two later speeches were more explicitly occasioned by TVA-like federal public works projects of dams, reservoirs, and power plants. One was a speech on August 17, 1962, in Pueblo, Colorado, on the Fryingpan-Arkansas Project:
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.
A third speech was “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 brings 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 all of these speeches celebrated the kind of governmental pump-priming and reclamation and conservation projects that are anathema to free marketeers like Laffer, and Kennedy’s implication was that the increasing or decreasing prosperity of separate regions affects national wealth—not that individuals’ wealth does. It is conceivable that Kennedy’s “If one section of the country is strangled, if one section of the country is standing still, then sooner or later a dropping tide drops all the boats” got morphed by Laffer and/or Reagan into “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.” If so, in a neatly Orwellian move, Laffer et al. have twisted Kennedy’s quasi-socialistic point, that helping poorer regions and people to prosper benefits those above them, into the opposite, that making the rich richer trickles down to all below in direct proportion. So if these are in fact the primary occasions on which Kennedy used the phrase, Laffer, along with countless other conservatives, would seem to be egregiously irresponsible 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 even more Orwellian twist to suggest that 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, though debatable, case can be made, as Laffer and others argue, 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.
After I sent my findings to Laffer, he answered that he would refrain from using the quotation again, until he finds the reference. He also suggested that I should verify whether Reagan used the quotation and provided references. It seems a bit cheeky for the one who has repeatedly cited the quotation, apparently at second-hand from Reagan, to ask someone else to verify it. So my response was, in the words of the old Alphonse-Gaston routine, “No, after you, my dear Arthur.”
I hope historians of Kennedy and Reagan can provide further enlightenment here.