Liberal conventional wisdom claims that “the great postwar prosperity” – the most cherished period of American economic history – came because we were smart enough to tax the rich at very high rates, expand government spending, and re-distribute wealth. Yet in fact, just the opposite is true.
John F. Kennedy was the first President since the 1920s to slash tax rates across-the-board. Ronald Reagan followed this tax-cut growth model. As even JFK realized, high taxes that punished success and fanned class warfare harmed the economy. In the 1950s, America had endured recessions every two or three years and unemployment ranks swelled. Only in the 1960s – particularly from JFK’s push for sweeping tax-rate cuts – did an uninterrupted boom at a high rate of growth (averaging 5 percent per year) drive a massive increase in jobs for the long term. Ronald Reagan’s tax cut revolution in the 1980s followed this pattern, rejuvenated the economy, and launched a two-decade boom.
Lawrence Kudlow and co-author Brian Domitrovic examine the secret history of American prosperity by exploring the little-known battles within the Kennedy Administration. They show why JFK rejected the advice of his Keynesian advisors who fought to maintain the high tax rates – including an astonishing 91% top rate. As the 1960s wore on, regrettably government-expanding and tax-hiking mistakes of Presidents Johnson, Nixon, Ford, and Carter were to undo Kennedy’s work – until JFK’s true heirs returned to the White House in the Reagan era. The authors argue and are convinced that these free-market principles can solve the long economic stagnation of the early 21st Century, too.