'Cheney Is Very Good News' Jude Wanniski January 4, 2001

Memo To: Website Fans, Browsers, Clients
From: Jude Wanniski
Re: Watching Cheney at Work

Now that President-elect Bush has completed his Cabinet, there is almost universal agreement that it not only has a balance to it, but that there is plenty of experience and even wisdom scattered throughout. We can see Vice President-elect Cheney’s hand in every selection, which is exactly what we expected of him. Looking back to the first we heard that Cheney was in the running to be GWB’s running mate, last July 22, I find the quick note I sent out to the clients of Polyconomics.

* * * * *

At 10:46 AM, 7/22/00:

The report that Dick Cheney is now the frontrunner to be Bush’s vp pick is very good news. I was really alarmed to think it would be John McCain or even Fred Thompson. That is because they represent distinct factions of the GOP and are hard-liners on military matters. Cheney was SecDef, but worked well with Colin Powell, who would be SecState. The two would be careful about a costly, gung-ho expansion of an ABM and prudent in the use of force in foreign dust-ups where U.S. involvement would be questionable. Cheney also understands and appreciates supply-side economics better than any of the other veep candidates, having been present at the Creation, so to speak. I would not call him a supply-sider, because he is not that confirmed in his policy views, but it would be much easier with him on the team to persuade a President Bush to name someone like Steve Forbes to be Treasury Secretary, which would be necessary to force badly needed reforms of the IMF and World Bank.

By the way, the Laffer Curve was first drawn by [Arthur] Laffer to demonstrate to Dick Cheney, then deputy White House chief-of-staff to [Donald] Rumsfeld, in December 1974, that tax rates could be lowered without loss of revenue. I was sitting at the table at the Two Continents Restaurant with Laffer and Cheney, saw the Curve sketched on a cocktail napkin, realized its importance, and subsequently named it the “Laffer Curve.” At the time, the message got through to Cheney at least to the point he and Rumsfeld persuaded President [Gerald] Ford to drop his push for a tax increase and switch to a tax cut, albeit one poorly designed by the Treasury. It was actually a “tax refund,” with no supply-side effects.

With Cheney in the White House, Bush could not be manipulated by one faction of the party or another and there would be a balance in the Cabinet. For the last year, I had worried that the advisors he had chosen on economic policy and national security were for all practical purposes the same that controlled the Dole campaign in 1996. Cheney understands internal checks and balances, which means with Cheney in the transition, there would be an unusual openness in a GWB administration, which is what this move seems to be all about. With a military hardliner on the ticket, Bush would still be favored to win, but would have a harder time bringing in a GOP Congress. With Cheney, I think the electorate would be a bit more comfortable with the idea of giving the GOP the White House and the Congress.

A footnote: My wife Patricia, a Reagan Democrat, said yesterday she would vote for Ralph Nader when Friday she heard McCain indicate he would go on the ticket if asked. This morning, she saw the report on Cheney and immediately said that this ticket would get her vote. Under no circumstances would she vote for Gore.

* * * * *

Well, we did not get Steve Forbes at Treasury, but Paul O’Neill, and we still await word on who O’Neill will bring in to assist him, but otherwise think Cheney has helped put together quite a group of men and women to serve our young President-elect.