A Book Review by Professor James Kwak
False Prophets, Free Markets, and the Fracture of Society
Appelbaum tells how this story has played out across a number of policy areas. In addition to the draft, the topics cover the heart of the conservative turn in economic policymaking: monetarism and the prioritization of inflation over unemployment; “supply-side” tax cuts; antitrust, or the lack thereof; deregulation; free international currency and capital markets; and the rise of finance. The book introduces us to the economists whose novel ideas persuaded politicians to see the world differently: Jude Wanniski, for example, whose famous cocktail napkin memorialized Arthur Laffer’s eponymous curve (if tax rates are too high, tax revenue declines), which was adopted by Jack Kemp and motivated Ronald Reagan’s 1981 tax cut; and Jim Tozzi, who in the 1960s pioneered the cost-benefit analysis of regulation, which has since become the corporate sector’s most powerful weapon against government oversight.