Guest: Wanniski, Jude
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THE OPEN MIND
HOST: RICHARD HEFFNER
GUEST: JUDE WANNISKI
“A GOURMET GUIDE TO THE NEWS”
HEFFNER: I’m Richard Heffner, your host on THE OPEN MIND, and for reasons that will become clear in a moment, lately I’ve had the occasion to think about the many parallels we draw each day – at least verbally – between food and journalism. A strange juxtaposition, you say? Well, in fact, most mornings my favorite national newspapers, The New York Times and the Wall Street Journal, do “serve up” a good deal of food for thought. Most of us “swallow” their reportage, though a bit of it gets “stuck in our throats” and some of us just won’t “stomach” their editorials. Then, too, we know always that, having devoured their print colleagues in the morning, in the evening, television journalists will invariably regurgitate their stories in turn, “half-baked” or otherwise. Of course, what occasions this low-cholesterol punnery is the new edition of Jude Wanniski’s “Gourmet Guide to the News”.
Mr. Wanniski is best known to most people as the former associate editorial page editor of the Wall Street Journal, whose outspoken advocacy of supply-side economics helped so vigorously to endow our nation – or burden it, as one sees fit – with Reaganomics…what George Bush had labeled “Voodoo Economics” before he became the heir-apparent. And, as the Journal itself reported even before Wall Street’s late 1987 unpleasantness, now it’s the supply-siders themselves – perhaps best personified by Mr. Wanniski – whose influence can be plotted with a downward curve, as they suffer a stunning decline in demand for their policy ideas – even in the White House…maybe particularly in the White House – despite continuing American prosperity and the Journal’s claim as 1987 ended that “Only people with their heads stuck resolutely in the sand refuse to concede one of the great supply –side successes of the 1980s – the rich are paying more taxes at lower rates.”
Later, I want to talk with Mr. Wanniski about that decline in the supply-s9ders’ own Laffer popularity curve…but first I know you must be as intrigued as I am by the very idea of his “media guide”, what he himself calls a kind of “Guide Michelin” to the national print media – again, quote, “A Gourmet Guide to the News”, unquote. For how, in short, can one who is best known for his extraordinarily controversial economic and political assumptions presume to rate national reporters and columnists as Michelin rates the restaurants of Europe? So, question: Mr. Wanniski, must we take your whole endeavor with a grain of salt?
WANNISKI: Well, Richard, I think that you have to accept the fact, as I present it out front, that I do have my biases and you have to discount them accordingly. But I do think, over a stretch of years, we’re now producing or publishing our third year of the Media Guide…the 1988 Media Guide has been out now for a week or two…that you will be able to see that the biases will kind of even out over the years because, primarily, my career has been based and focused on communications. I never had a course in economics. I spent twenty some years as a journalist, most of it for Dow Jones and Company, where there was a very heavy stress on objectivity in reporting and a pretty good stress on subjectivity in editorial comment. So I make no bones about the fact that I come from a certain direction, but I think the biases are narrow enough that the book is worthwhile as a fair guide to…
HEFFNER: You mean, we now have here the great…another great communicator rather than the supply-sider? Is that what you want to be remembered as?
WANNISKI: Well, this whole supply-side movement began back in the early 1970s with Art Laffer, who has a Ph.D. in economics, and Jack Kemp, who was the kind of leader. Congressman Kemp, on the political side…and I was the communicator. I sometimes just call myself “The Mouthpiece” for supply-side – the propagandist, the polemicist. I really contributed very little to the theory itself, but it was a struggle in early 1970s when I got to the Wall Street Journal editorial page to find out what was going wrong in the world economy. And I couldn’t find economists who could explain what was happening – why we had this great inflation, why we had this great stagnation. It wasn’t supposed to happen, according to the dominant demand-side ideas of the economics profession left and right. And I struggled to find some economist…this was when I was on the editorial board of the Wall Street Journal…some economist or economists who had forecast the great explosion in oil prices in 1973, the great inflation rate, the very high unemployment rates, interest rates in the 1970s what we’d never experienced, even in the Civil War period, that we were experiencing then. And I found that there were only a few economists, two, in fact – Robert Mundell of Columbia University, and Art Laffer at the University of Chicago…his student, Mundells’ student…who had forecast. I said, well, anyone who has a model that can predict the future, that’s the economist I want to talk to. It took me three or four years of talking to Mundell and Laffer, because at first it seemed they were only talking in equations, for me to understand what it was…how the world works…The Way the World Works – which was the title of my book in 1978. I coined the phrase, “supply-side economics”, to try to distinguish the flavor of what we were doing…the framework of what we were doing, how it differed from conventional economic analysis of the period.
HEFFNER: Well, now…now…I…I…I…you piqued my curiosity. More than that, I would like to know…and Bob Bartley was here at this table just a few weeks ago… I had the feeling that I had an unreconstructed supply-sider here. Is that true today? Or is there something of a disavowal that I just get a hint of in what you’re saying?
WANNISKI: No, what I’m saying is what I’d learned in this period, back in the early 1970s, that there are…in the economic profession there are different tools in the bag. And, one, there are various demand-side schools that really sprung up in the Great Depression, but the supply-side school is one that had lasted for almost 200 years and really fell…it crashed with the Great Crash of 1929, when the economists of the period couldn’t explain why the market crashed in ’29 and why the Depression suddenly occurred. It wasn’t supposed to happen. What I saw Professor Mundell doing…a Canadian…and his student Laffer doing in really the late ‘60s…they began this…is reconstructing the classical model. I believe now that the classical supply-side model is not going to go away again. I mean, you can come back a century from now and you’ll see supply-side framework as part of the mixture. I never have said in the years I’ve been pushing supply-side, that demand-side theory was wrong. It is just that had applications at different periods – one model, one framework operates better in a depression period, perhaps, and another operates better when you want rapid economic growth – and know how to get it.
HEFFNER: Well, right now we are into 1988 a bit. In our own times, if we were to pick up the editorials that you wrote in the Wall Street Journal on supply-side economics – now, some years back – would they be as acceptable to you today as they were then?
WANNISKI: Would the editorials I wrote ten years ago?
HEFFNER: Uhum, the ideas that you expressed.
WANNISKI: Oh, absolutely…
HEFFNER: …the political imperatives that you suggest.
WANNISKI: Absolutely. If you would…if your audience would like to take a note: December 11th, 1974, on the Op Ed page of the Wall Street Journal, by Jude Wanniski, is an interview with Robert Mundell of Columbia University, and Mundell, in one real long column of maybe fifteen hundred words, laid out the whole prognosis for the world economy. He said, here’s why we are in the situation we are, here’s what we’re going to have to do to correct it, and here’s what will happen if we don’t correct it. Now you can print that today and read it, and it seems as fresh as it was then.
HEFFNER: But that’s an analysis…as you said a moment ago, there’s supply-side, there’s demand-side – where does Wanniski set down now?
WANNISKI: Well, I’m still a supply-sider. I see no need to move towards a demand model at the time. I might ten years from now or twenty years from now, but I think the world economy and the world political economy is still in early stages of embracing the whole of the supply-side model. And we’re seeing…you pick up papers any day of the week, almost, at least the financial papers: Financial Times, Wall Street Journal that some new victory is had somewhere in the world in moving toward the acceptance of most of the supply-side model in the rest of the world. We’ve achieved practically everything that Mundell had said that we should do insofar as the United States is concerned.
HEFFNER: Was the news story in the Wall Street Journal then inaccurate, saying that the supply-siders…not quite that you can’t get into the White House…but that the supply-siders aren’t quite as welcome now as they had been at the beginning of the Reagan administration?
WANNISKI: Well, I’d say that…you said that there’s a stunning…there’s no longer a stunning demand for their services, and that’s because those achievements have been so great that back twelve years ago, on Wall Street, earliest support for supply-side ideas came from money managers – portfolio managers – you know, Irving Kristol says that they’re the…the best class of people he knows is money managers because they have no dogma – they can’t afford to turn away a idea because it might be the idea that winds up making money for them. So there was a great body of information that we had to present then, and as more and more of it was sold…pieces of it sold during the last years of the Carter administration, through the cut in the capital gains rate in 1978, through Congressman Steiger of Wisconsin…the late Congressman Steiger of Wisconsin. And then then…Ronald Reagan – that was the great boon to supply-side – it was…a great boost to us was finding a political instrument in Reagan, who had studied economics, 1928 to 1932, when supply-side theory was practically all that was taught in American universities. And…so that was…
HEFFNER: You say you found, or the supply-siders found, a great boon in the presence of…in the person of Ronald Reagan. You’ve suggested, too that he found, not just great solace, but perhaps the key or the clue to victory in 1980 in the supply-siders.
WANNISKI: In 1979 all the supply-siders, back in that time, and all of them amounted to six or eight, were pleading with Congressman Kemp to run for president because we thought that he was the only political…politician around who had schooled himself in these ideas and knew what needed to be done to pull the U.S. and the world economy out of this implosion of monetary inflation impacting progressive tax systems to smother the U.S. economy. Mundell, in 1974…that piece I mentioned…he said the economy is being asphyxiated by these high marginal tax rates that had been swollen by inflation. So that the tax rates had to be brought down and a monetary reform had to take over. All of the…the worst things that happened to the economy really were done by Richard Nixon in 19…August 15, 1971. It was the final windup of demand theory, where he took the U.S. off a gold standard…we had been on a gold standard essentially since 1791…and Mundell said, well, this means there will be a big inflation. And we had a very high, steeply graduated personal income tax system that Mundell also observed would be impacted by the inflation and cause what we now know as bracket-creep. So we moved on to President Reagan…Reagan ran then, as he had not in 1976 when he was defeated…1980…he ran…
HEFFNER: …on your ticket.
WANNISKI: On these ideas, for the most part. He talked on the stump about the need for monetary stability in gold, but his campaign advisors thought it was too dangerous for him to talk about that kind of a monetary reform and he never got around to that in ’80 or ’84. So we now see…the English speaking world is more or less adopting…that’s the first wave. We saw, after our major tax reform, in 1985…now the Canadians have adjusted their tax rates down. Margaret Thatcher, when she took office in 1979, the top tax rate in the U.K. was something on the order 96%, it is now down to 40!
HEFFNER: …Does this…
WANNISKI: …New Zealand, Australia, Jamaica, those…it’s the word…the ideas have spread through the English speaking world and will next be picked up maybe by Germany, France, and those elements.
HEFFNER: Immediately, of course, the question is, will they be picked up by the man who called them “voodoo” economics. Are you satisfied that George Bush will be as steadfast…
WANNISKI: At the moment, I think we all feel pretty much that Bush is not…would not touch marginal tax rates. He’s not going to touch the income tax or the corporate tax rate if he were elected president. He also says he will not, if elected president, raise any taxes. But…
HEFFNER: …What do you think?
WANNISKI: I think there would be a drift, more of a drift with George Bush than with Congressman Kemp. But it depends upon how the economy does between now and inauguration day next January 1989. The National Economics Commission will report sometime in March and most of the members of The National Economics Commission…from the private sector, Lee Iacocca, Drew Lewis, Robert Straus, are even now saying that they’ve been put together in order to provide a screen and a covering for the big tax increase that everyone knows is inevitable for 1989. I don’t think it’s inevitable. I take some comfort with Bush, having made these pledges, and even if there were to be a tax increase of a kind that some are talking about – on excises or gasoline or energy – I think it would be difficult in a Bush administration to get them through with an offsetting cut in the capital gains rate.
HEFFNER: You know, I, I would love to stay with this subject, but I want to go back to your Media Guide – the new one, The 1988 Media Guide: A Critical Review of the Print Media. You don’t have on the cover any longer that – “A Gourmet Guide to the News”.
WANNISKI: Oh, I got tired of looking at that.
HEFFNER: You got tired of looking at that. You know, the thing that interested me is, I wonder whether your success, at the Wall Street Journal…your journalistic success, your editorial page success…in pushing the supply-side ideas have fed, if you’ll forgive me, your interest in looking at the media in terms of your understanding of the important role they play in our lives. There are so many journalists who come here on this program and when asked about the power of the media – they say, basically, “there’s no one in here but us chickens.” Did the success of the communication of supply-side ideas in any way have to do with your…
WANNISKI: …It did, and it was, perhaps, because I was a the center of this triad – Laffer, Kemp and Wanniski – found ourselves three of a handful of people on the whole planet who thought we knew how to solve the problems but we couldn’t communicate them because the communications media had discarded us as uninteresting and maybe half crazed. We were extremists, when it all started. We were viewed as so far on the periphery of the world of ideas that we couldn’t get any message across through the media. Now, you were…part, now, one the reasons for the lesser interest in what we have to say is because we’ve become maybe not dead center in the mainstream, but certainly we’re in the ball park. And…but…I recall…it really began…the whole thing began with Irving Kristol of NYU, who asked to have lunch with me back in 1973 and asked me to write a piece of the Public Interest on the ignorance of the press corps…on the economic ignorance of the press corps. He was so disdainful of what he was reading. I was disdainful, too – this is the energy crisis, when practically every newspaper and television news show ascribed the whole reason for the dramatic rise in the price of oil to the oil cartel – to Mobil and Exxon – and I saw that what was happening was not because of the…and I argued with Irving back then that I shouldn’t write a criticism of the news media because the news media were just reflecting the ignorance of economists whose string had run out on the demand theories that had developed in the early ‘30s. He said, ‘Well, what would you write?’ And I said, ‘I would write a piece about these two economists I discovered.’ And he said, ‘Who are they?’ I said ’Robert Mundell and Art Laffer.’ So I wrote, in the Spring of ’74, “The Mundell/Laffer Hypothesis: A New View of the World Economy.” And the fact that I was in the middle of the news media made me feel that the world economy would benefit more if there were more acceptance of these ideas – at least that newsmen would hear part of the message. And I considered a great success, not of the media guide, but of the work that I did as a polemicist, a propagandist, that where Leonard Silk paid no attention at all in the early 1970s, by the late ‘70s Leonard Silk, the senior columnist and one of the best of the whole profession, then began writing about us.
HEFFNER: Yes, but now look – polemicist. Interesting word. You describe yourself, at that time, as a polemicist. Do you give yourself then plaudits for being the journalistic polemicist? And is that the basis on which you will, today, find nourishment in one journalist as opposed to another?
WANNISKI: Well, I have a set of standards that I apply for the Media Guide and I know, after the first media guide came out, to take Leonard Silk back. Leonard Silk called me up and complained that I’d only given him two and a half stars out of a possible four. And he says, ‘I know, you’ll never give me four stars because I’m a Keynesian.’ And I said, ‘That’s not true! That’s not true, Leonard,’ because I’d known him for a long time. And I said, ‘Look, I gave Peter Kilborn…Peter Kilborn of the New York Times three and a half stars. He almost made it to four and he’s a Keynesian.’ He said, ‘Killborn is a Keynesian?’ I said ‘Yes.’ He said, ‘He is not!’ And I said, ‘Well, I know he is.’ And he said, ‘How do you know?’ And I said, ‘Well, he told me he is a Keynesian.’ So Leonard quieted down at that point. But I’m looking for…not looking for economic columnists who are writing supply-side. A lot of the supply-siders, who are in the journalists’ profession now, are mad at me because I gave them such low marks.
HEFFNER: Yeah, but I’m not just talking about economists. Not just because the subject makes my eyes sort of cloud over. I’m talking about journalists generally. Your media guide doesn’t. …you don’t limit yourself to economists. Generally though, are we to assume that polemical excess and excellence is going to be one of the basis’ for five stars, four stars, rather than two stars or one star?
WANNISKI: Well, you can assume that…
HEFFNER: …No, no, I mean honestly, correctly. Is that what you are going to do?
WANNISKI: I don’t think so. If we did that…I decided at the very outset of embarking on this project, which consumes an enormous amount of my time annually that I had to be rigorous in following my own guidelines. And first of all, I had no more friends. In over twenty-five years in the press corps I’d built up a whole legion of friends left, right and center. And I had to start out with the idea that I can’t afford to have friends, I can’t afford to let my close friendship with Robert Tyrell of the American Spectator…I mean, he hasn’t talked to me for two years because I pointed out that his material had been on the decline, maybe because he’s taking himself more seriously than he should. And others – it’s not only Tyrell – but several examples, one an old classmate. I went to journalism school…I have a Masters in Journalism from UCLA, and one of my classmates from there, I wound up knocking around the last two years and he just wouldn’t talk to me. Eventually all this will sort out.
HEFFNER: But don’t you feel…what would you have thought of…some single individual, with a group around him from your own institute there, determining who gets the awards, who gets the five stars, who gets the two stars, who gets no stars, who gets praised, who gets not?
WANNISKI: Oh, I would’ve been very, very suspicious.
WANNISKI: Absolutely, absolutely very suspicious. And I would have…but that’s why I decided at the outset that this Media Guide will have to come out for several years so that people would see that what I’m applying are journalistic standards of excellence.
HEFFNER: Which means what, pray tell?
WANNISKI: Well, the…As I said first, the highest…in terms of the reporter, which is communicating news and analysis, that I expect a strict adherence to objectivity, and for columnists and commentators, I want subjectivity. I don’t want to read editorials or columns that not only say very little, but are so bland as to force me to do the work that they should be doing. They should be giving us sharp, well shaped points of view. That’s why there’s so many conservatives who I know who are appalled that in the 1988 Media Guide they give Anthony Lewis four stars! Anthony Lewis is one of those hated journalists among the right…the conservatives. And I’m probably not trusted by…won’t be trusted by liberals in the press corps because I’ll give high marks to Evans and Novak…four starts. I knew that it would be several years before the profession itself would accept what I’m doing here.
HEFFNER: Well, in the early…one of the earlier editions, you wrote: ‘Individual journalists have no systematic yardstick of achievement and for recognition could only aspire to the big prizes – the Pulitzer and Loeb Awards, for example. It has been my thought for many years that such a standard applied to journalists rather than to their publications which serve the interests of communication generally.’ Sure, but the standard’s set by one guide, right?
WANNISKI: Well, it’s one guide…I suppose the Michelin Guide that you referred to earlier, that was my model.
HEFFNER: Do you really like the comparison between food and journalism?
WANNISKI: No, the comparison is that the Michelin Guide comes out as an annual in a book and that it is a critique of the culinary arts. And what I look upon this is as…I look forward to the day when my name is not on the Media Guide. Like I look forward to the day when it can be institutionalized and acquired by a company or a corporation…as Michelin sells tires, my plan was always to sell this to a paper company and get out of it after there has been whole teams of critics trained.
HEFFNER: Not the “Guide Wanniski”?
WANNISKI: No, I don’t think so. I didn’t…my idea was to originally have this developed over the course of the years, institutionalized, and then I would go on and do something else, because it is a very harrowing experience to produce as I have 440 pages of criticism that was essentially written between November 1st of ’87 and December 15th, where we were working, me and my staff, working seven days a week, fourteen, sixteen hours a day. You can’t, as with the food guide, begin writing your criticisms of restaurants in July. We have to do it all at the end of the year!
HEFFNER: And it doesn’t depend upon whose taste?
WANNISKI: Well, it…I’ve now trained a group of people who at first were very…it’s very hard to get them to knock their political biases out when they begin the process. But after the third year of doing it, there are people here who swear that I have written the whole book because they know me, they know what I’ve done. This ’88 Media Guide, I’ve written only 20% of. The other 80% has been written by people who have worked with me in the last two years and have now come to understand what it is I’m trying to do and can apply these same critical standards.
HEFFNER: Well, I don’t know how you would color ‘Chutzpah’ or what it tastes like, but it does feel as though that’s what we have here and yet it is intriguing, Mr. Wanniski, and I wish we had more time, but I’m getting the signal ‘Cut,’ and I know to whose ever taste is involved, we have to cut. Thank you for joining me today.
WANNISKI: Thank you, Richard.
HEFFNER: And thanks, too, to you in the audience. I hope you’ll join us again next week. And if you care to share your thoughts about today’s program, about our guest, about his theme, please write to THE OPEN MIND, P.O. Box 7977, FDR Station, New York, NY 10150. For transcripts send $2.00 in check or money order. Meanwhile, as an old friend used to say, “Good night and good luck”.
Continuing production of this series has generously been made possible by grants from the Richard Lounsbery Foundation, The M. Weiner Foundation of New Jersey, The Mediators and Richard and Gloria Manney, Mr. Lawrence A. Wien, and The New York Times Company Foundation.