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Chait devotes his most absorbing and unsettling pages to this lunatic vanguard of the Haves. If you thought economics was the dismal science, it will morph into the art of happy-talk when you meet Arthur Laffer and Jude Wanniski, the dynamic duo of "supply-side economics," the faith that cutting marginal tax rates on upper-income earners would spark economic growth, curb inflation, and enlarge government revenue. (I use the word "faith" deliberately, as Chait refers more than once to the "quasi-religious" or "theological" character of right-wing economic thought.) Considered kooky by even the most business-friendly economists, supply-side economics arrived at a fortuitous moment in the late 1970s, when traditional Keynesian approaches seemed incapable of addressing sluggish productivity, hyper-inflation, and rising deficits. Few outside a small circle of devotees took supply-side thinking seriously—and as Chait establishes, fidelity to its principles has left a fiscal catastrophe in its wake. But Chait proves that, for many of the Right's key political and intellectual players, the attractions of supply-side thinking were never really about economics. Rather, its enthusiasts hoped for a fundamental realignment of American politics: Republicans used supply-side buncombe to beguile wavering Democrats, while the wealthy licked their chops at the prospect of even more money in the bank. As the conservative intellectual Irving Kristol admitted, those who were "not certain of its economic merits … quickly saw its political possibilities."
And these ideologues aren't just committed—they're nuts. Chait isn't kidding when he suggests that supply-side's most representative promoters are deranged. While Laffer was merely inept (he left the Nixon Administration in disgrace after an especially bone-headed episode), Wanniski, his now-deceased mentor, was out to lunch. In Wanniski's view, for instance, the Nazi conquest of Europe was spurred, not by fascist ideology, but by taxes so high that Hitler needed lebensraum to alleviate the pressures of a distorted economy. (By this logic, as Chait snidely notes, Bill Clinton should have invaded Canada after the 1993 tax hike.) But supply-side's most colorful booster is George Gilder, whose panegyrics to wealth, computers, and cyberspace mark a dizzying apogee in capitalist ideology. Ever since his delirious fulminations against the women's movement (he once opined that "there is no such thing as a reasonably intelligent feminist"), Gilder has been a virtuoso of impending millennium, a marketing specialist dealing in rapture at the promise of silicon technology. With Wealth and Poverty (1981)—in which he contended, in apparent seriousness, that capitalism was a gift economy—and his subsequent (and popular) celebrations of the internet, Gilder has beguiled a generation of Bill Gates wannabes with his techno-free-market hysterics. (I've read most of Gilder's stuff—research, I swear—and I have to say that Chait doesn't convey the half of Gilder's euphoric loopiness.)
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