Nobel laureate Paul Krugman has an article in this morning's New York Times that focuses on the discredited supply-side economic philosophy and why it continues to survive. The basic theory is that by reducing tax rates on the wealthy and on corporations, a surge of economic activity benefitting everyone will be unleashed, when in fact nothing of the sort happens. Meanwhile, social services and infrastructure are cut. So why has the theory survived? The short answer is it rewards corporate interests and the very wealthy, who push the theory using such front organizations as the American Legislative Exchange Council which promotes anti-labor, anti-environment and other reactionary legislation around the country.
St. Ronnie of Hollywood let the "charlatans and cranks" of supply-side theory into the halls of government during his administration, and Federal deficits skyrocketed. As Krugman notes, you have to follow the money to understand:
"But how can you justify enriching the already wealthy while making life harder for those struggling to get by? The answer is, you need an economic theory claiming that such a policy is the key to prosperity for all. So supply-side economics fills a need backed by lots of money, and the fact that it keeps failing doesn’t matter."
