Robert Mundell surely is the greatest humanitarian living, since Norman Borlaug died last September.
Borlaug won the Nobel Peace Prize for creating the “Green Revolution” — raising agricultural yields so dramatically that his work averted the (widely predicted) death by starvation of over a billion souls.
Mundell, father of supply-side economics and holder of the Nobel Prize in Economics, brought over a billion people out of poverty into prosperity.
Mundell was in Washington April 16 to speak to an overflow crowd at the Heritage Foundation on The Dollar, The Euro, and the International Monetary Order. It was an honor to meet the man who (along with Ronald Reagan, Jack Kemp and a few others) created the policies that created $100- trillion-plus of world wealth.
Yes, that is “trillion,” with a t.
Mundell, Kemp, Art Laffer, Jeffrey Bell (a business partner of this writer), and a few others were the fountainhead of “low tax rates, stable money, and free trade” as the foundation for prosperity. Few now remember how ridiculed (“Voodoo economics,” is what candidate George H.W. Bush called it while running against Reagan in the 1980 Republican presidential primaries) was this prescription.
When Reagan campaigned against Carter, the Dow Jones Industrial Average was well below 900. Applying what Jude Wanniski (who coined the term “supply-side economics”) called “the Mundell-Laffer Hypothesis,” America rode the wave to a Dow now still well over 10,000.
When adopted by much of the rest of the world, the Mundell-Laffer Hypothesis made it possible for more than a billion souls to move from penury to prosperity.
Mundell privately shared a piquant observation with this writer. He considered the movie Taxi Driver to be the hinge of history. Had not Martin Scorsese produced this film, John Hinckley would not have developed the insane crush on Jodie Foster that drove him to attempt to assassinate Reagan in March 1981.
Were it not for the outpouring of public sympathy after this vile assassination attempt, Reagan might not have had the support to enact the Tax Reform Act of 1986, which lowered the top income tax rate to 28% and unleashed the world’s supply-side revolution.
According to the World Bank, the world’s GDP in 1980 was around $11 trillion. Today it is around $60 trillion. The added $50 trillion-per-year capitalizes to over $100 trillion in new wealth… even when adjusted for inflation.
Who’s ultimately was behind this? Mundell and a few other key thinkers.
Mundell is also the father of the Euro and remains the key economic advisor to the People’s Republic of China.
While Reagan properly receives credit for statesmanship in unleashing the tsunami of prosperity, history likely will credit Chinese Communist Party chairman Deng Xiaoping as the agent who, with the words “to get rich is glorious,” affected the greatest national transformation.
Mundell, that great supply-sider, has been guiding China in 31 unbroken years of economic growth, avoiding the Great Recession. Less than double digit annual growth rates are viewed as shameful.
Mundell provided the “how to” for “to get rich is glorious.” He transformed America, Europe and China, in each of which he maintains a residence. Strangely, he is more honored in China, where a university was recently named after him than here in America.
When is the Nobel Peace Prize committee going to adjoin Mundell’s name to Borlaug’s? And when will Congress call upon the great supply-side figures to once again bring forward the reforms needed to ignite a fourth great supply-side wave of increased world prosperity?
Ralph Benko, is a principal of Capital City Partners, of Washington DC, the author of The Websters’ Dictionary: How to Use the Web to Transform the World, which may be downloaded without charge from http://.thewebstersdictionary.com.