Jude Thaddeus Wanniski (June 17, 1936 – August 29, 2005) was an American journalist, conservative commentator, and political economist.
Early life and education
Wanniski was born in Pottsville, Pennsylvania, the son of Constance, who worked at an accounting firm, and Michael Wanniski, an itinerant butcher. His father was of Polish descent and his mother was a Scottish immigrant. When he was still very young, his family moved to Brooklyn, where his father became a book binder. His grandfather was a Pennsylvania coal miner and a dedicated Communist who gave his grandson a copy of Das Kapital for his high school graduation.
After college, Wanniski worked as a reporter and columnist in Alaska. From 1961 to 1965 he worked at The Las Vegas Review-Journal as a political columnist, where he taught himself economics as he learned card counting.
From 1972 to 1978, Wanniski was the associate editor of The Wall Street Journal, the part of his career for which he is perhaps best known. He left after being discovered at a New Jersey train station distributing leaflets supporting a Republican senatorial candidate, an act considered an ethics violation.
In 1978 Wanniski started Polyconomics, an economics forecasting firm, where he and his analysts advised corporations, investment banks and others.
He also began directly advising politicians on economic policy, first candidate Ronald Reagan and later presidential hopefuls Jack Kemp and Steve Forbes. He helped design the tax cuts made during Reagan's first term in office. His formal role as a Reagan adviser ended after an interview he gave to the Village Voice was published under the headline "The Battle for Reagan's Mind."
In 1997 Wanniski founded the online learning center known as the "Supply-Side University".
Polyconomics as a corporation ceased operations on June 30, 2006, ten months after Wanniski's death, but the name (a combination of "politics" and "economics") lives on at The Polyconomics Institute, where one can find the Wanniski's collected works for Polyconomics, as well as correspondence with economic policy makers, and lectures. "Supply-Side University" is also part of that institute.
Economic and political beliefs
Wanniski consistently advocated the reduction of trade barriers, the elimination of capital gains taxes, and a return to the gold standard.
Wanniski was instrumental in popularizing the ideas of lower tax rates embodied in the "Laffer Curve," and was present in 1974 when Arthur Laffer drew the curve on the famous napkin for Dick Cheney and Donald Rumsfeld.
Over the years, Wanniski repeatedly emphasized high tax rates as the cause of poverty in Africa. Wanniski collected details about the tax structures of various countries in Africa and explained how they were limiting the progress of the poor. These observations ended up as part of an episode of The West Wing.
The Two Santa Claus Theory
According to Wanniski, the theory is simple. In 1976, he wrote that the Two-Santa Claus Theory suggests that "the Republicans should concentrate on tax-rate reduction. As they succeed in expanding incentives to produce, they will move the economy back to full employment and thereby reduce social pressures for public spending. Just as an increase in Government spending inevitably means taxes must be raised, a cut in tax rates—by expanding the private sector—will diminish the relative size of the public sector." Wanniski suggested this position, as Thom Hartmann has clarified, so that the Democrats would "have to be anti-Santas by raising taxes, or anti-Santas by cutting spending. Either one would lose them elections."
The theory states that in democratic elections, if Democrats appeal to voters by proposing more spending, then the Republicans cannot gain broader appeal by proposing less spending. The first "Santa Claus" of the theory title refers to the Democratic party which promises spending. The "Two Santa Claus Theory" recommends that the Republican party must assume the role of a second Santa Claus by not arguing to cut spending but rather offering the option of cutting taxes.
This theory is a response to the belief of monetarists, and especially Milton Friedman, that the government must be starved of revenue in order to control the growth of spending (since, in the view of the monetarists, spending cannot be reduced by elected bodies as the political pressure to spend is too great). See also Starve the beast.
The Way the World Works
Wanniski's 1978 book, The Way The World Works, documented his theory that the US Senate's floor votes on the Smoot-Hawley tariff legislation coincided day-to-day with the Wall Street stock market Crash of 1929, and that the Great Depression was the result of the Smoot-Hawley tariff, rather than any failure of classical economics.
Wanniski is also notable for his journalism on the alleged weapons of mass destruction (WMD) in Iraq. As early as 1997, Wanniski posted columns on his website alleging that after November 1991, UNSCOM inspectors had never found WMD in Iraq, and in fact had found and destroyed all of Iraq's WMD programs with the help of Saddam's regime in the months following the first Gulf War. Wanniski not only recognized the prospective importance of the Iraqi WMD question before other journalists, he argued correctly that Iraq didn't have any WMD and stated that the U.S. would never allow UNSCOM to end the inspections regime no matter what Iraq did.
He became a somewhat controversial figure in the conservative movement at the beginning of 2003 when he vocally opposed the impending US war with Iraq. On October 27, 2004, he publicly denounced George W. Bush, saying that "Mr. Bush has become an imperialist—one whose decisions as commander-in-chief have made the world a more dangerous place". Eventually Wanniski endorsed the 2004 Democratic candidate, John Kerry, although he clearly preferred the Republican platform on issues related to taxation.
Wanniski has been credited with coining the term supply-side economics to distinguish it against the more dominant "demand-side" Keynesian and monetarist theories. But he told a friend that the actual phrase should be credited to Herbert Stein, for Stein's phrase "supply-side fiscalists."
The rising GOP star Jack Kemp became a supply-side economics advocate due to Wanniski's tutelage, and would work to put his proposals into legislative practice.
The Way the World Works initiated a revival in classical economics and was named one of the 100 most influential books of the 20th century by National Review magazine. Conservative commentator Robert D. Novak said, in the introduction to the 20th anniversary edition (1998) of the book, that it was one of two books that "shaped [Novak's] mature philosophy of politics and government." (Whittaker Chambers' Witness is the other.)
Starting in 1987, Wanniski edited an annual "Media Guide" in which he rated pundits on a four-star scale. Some conservatives, such as George F. Will and Norman Podhoretz received only a single star.
In 1998, Wanniski attempted to foster dialogue between Louis Farrakhan and those who had labeled him anti-Semitic. He arranged for Farrakhan to be interviewed by reporter Jeffrey Goldberg who had written for the Jewish weekly The Forward and the New York Times. The extensive interview was never published in either publication, and Wanniski posted it on his website in the context of a memo to Senator Joseph Lieberman.
Wanniski died of a heart attack on August 29, 2005, in Morristown, New Jersey, while working at his desk. He was survived by his wife, Patricia, and children Matthew, Andrew, Jennifer Harlan, his brother Terrance Wanniski and sister Ruth Necco.
At the time of his death, Wanniski was at the low point of his political influence, according to longtime friend Robert Novak. He was running his economic consultancy from its Parsippany offices. He spoke of having many Wall Street clients, although he complained that some had left due to his politics. He posted personal commentaries several times a week on his personal website, on topics ranging from international politics and trade policy to reviews of films.
- Steven Miller (August 31, 2005). "Jude Wanniski, 69, Provocative Crusader for Supply-Side Economics". New York Sun.
- Douglas Martin (August 31, 2005). "Jude Wanniski, 69, Journalist Who Coined the Term 'Supply-Side Economics'". New York Times.
- Robert D. Novak (September 1, 2005). "Father of supply side: An advocate who changed the world". CNN.
- Gregory Fossedal (September 2, 2005). "Wanniski's last word". United Press International (UPI).
- Napkin image courtesy of Polyconomics.com
- Jude Wanniski (1976a). "Taxes and a Two-Santa Theory". National Observer (March 6).
- "Jude Wanniski: Taxes and the Two Santa Theory", online copy of the 1976 article "Taxes and a Two-Santa Theory", accessed November 28, 2010
- "Two Santa Clauses or How The Republican Party Has Conned America for Thirty Years"
- “Propaganda Wars #2”, memo, Polynomics.com
- "A Vote for Senator Kerry", Polynomics.com
- "The 100 Best Non-Fiction Books of the Century", National Review magazine
- Novak, Robert D. Introduction to the 20th anniversary edition of The Way the World Works
- Jude Wanniski’s official foundation website
- Supply-Side University
- A film clip "The Open Mind - A Gourmet Guide to the News (1988)" is available for free download at the Internet Archive [more]