Last week, much of the living inner circle of Rep. Jack Kemp’s brain trust convened, on Capitol Hill, to observe the 30th anniversary of Kemp’s introduction of the Gold Standard Act of 1984. The Jack Kemp Foundation President Jimmy Kemp considers the gold standard the most important unfinished element of his father’s policy agenda. Enactment, in the opinion of this columnist and others, would unleash a tsunami of equitable prosperity on America and the world.
The Jack Kemp Foundation, in association with American Principles in Action (which this writer serves as Senior Advisor, Economics), presented a Kemp Forum on Growth. Also presenting were key Kemp inner circle figures of the heyday of the Supply Side: Dave Hoppe, who served as Rep. Kemp’s chief of staff; John Mueller, Economic Counsel to the House Republican Conference of which Kemp was chair; Jeffrey Bell, national co-chairman of Kemp’s 1988 presidential campaign, and campaigning, primarily on the gold standard, as the Republican nominee for US Senate from New Jersey. The Forum was moderated by this columnist, back then a very junior Kemp associate, founder of the Prosperity Caucus.
Will a new political leader pick up the opportunity to reintroduce Kemp’s legislation and complete Kemp’s magnum opus … putting America, and the world, back on the fast track to sizzling economic growth? It’s an appealing opportunity. Many — Republican and Democrat — who supported the original Kemp supply side agenda politically flourished. Most notably the Kemp growth formula of lower tax rates and good, rather than easy, money proved crucial to propelling Ronald Reagan to the presidency … and, then, to a landslide re-election by a prospering America.
When Reagan first began his 1980 campaign the Dow was bouncing around (even well below) 1,000. Reagan, inspired by Kemp, put the Dow on a course to rise by an order of magnitude.
And much more. Kemp’s policy formula, under Reagan and Clinton, created close to 40 million jobs.
We haven’t seen anything like that since.
There were two elements to Kemp’s formula. Lower marginal tax rates. And good money.
The “good money” aspect of the Kemp formula has decayed, far more seriously than have his tax rate cuts. With “easy” — which is to say, decayed — money, America has suffered economic stagnation for well over a decade. By putting monetary policy back on track America can resume its historic course of growing equitable prosperity — without prices creeping up and putting a big, if semi-obscured, squeeze on workers.
Kemp, posthumously, again offers us the key to stupendous growth.