Columnist Sowell claimed "no one has ever advocated" trickle-down economic theory; Reagan's budget director would disagree
Research ››› ››› SIMON MALOY
In his March 29 nationally syndicated column, Thomas Sowell claimed that "no one has ever advocated" the "trickle down theory" -- a conservative economic theory that forms the basis of "supply-side" economics, which prescribes investments and tax breaks for businesses in order to stimulate the economy. In fact, former President Ronald Reagan's then-director of the Office of Management and Budget David A. Stockman indicated in a December 1981 interview in Atlantic Monthly that a substantial portion of Reagan's economic policy was based on the "trickle-down theory."
A January 10, 1982, Washington Post article stated the following about Stockman's Atlantic Monthly interview:
David A. Stockman, director of the Office of Management and Budget, in his now famous conversations with Washington Post editor William Greider recorded in an article in the Atlantic Monthly, agreed that a key element of Reagan administration economic policy -- reducing the top personal income tax rate from 70 percent to 50 percent -- was "trickle down."
In order to get Congress to go along with cutting the top rates, the same logic that lower rates would provide incentives to taxpayers whatever their income level had to be devised, Stockman indicated. "It's kind of hard to sell 'trickle down,' so the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory," he said.
From Sowell's March 29 column, titled "Random Thoughts" and consisting of a number of unrelated paragraphs on a variety on topics:
People on the political left not only have their own view of the world, they have a view of the world which they insist on attributing to others, regardless of what those others actually say. A classic example is the "trickle down theory," which no one has ever advocated, but which the left insists on fighting against.
Sowell is an economist and the Rose and Milton Friedman Senior Fellow on Public Policy at the conservative Hoover Institution on War, Revolution and Peace at Stanford University. His column is distributed by Creators Syndicate.