State university and the two of them worked on the book together and they will be talking about it together and we are so thrilled and honored to have you both here and i should mention also that route larry is a regular customer at thecorner bookstore and has been for years. And that makes it so special and so personal so please join me in welcoming larry and brian, thank you. [applause] thank you very much, i appreciate it. Are we on, both mikes . We welcome cspan for covering us, thank you very much. Its true, i larry kudlow and im a local. Actually, when random house started organizing this, which one . That works. This one doesnt sound great. Random house said a while back when we finally got this thing published, its good to have a couple local bookstores and i said how about across the street . He said terrific idea. Weregoing to do a bunch of these around the country, weve done tons and tons of media. A lovely oped piece of ours was published in todays wall street journal. This is my cowriter and a good friend brian domitrovic. Brian by the way is the head of the Laffer Center . Senior associate. Senior associate and a longtime friend of mine. His previous book iconoclast was all about the supply side revival going on and hes a harvard trained historian as ive said before. His historiography is the glue that held this entire book together so what i want to do is just read a few excerpts from this thing to get a feel for it and brian will then speak on whatever he wishes to speak about and then we will enjoy some wine, cheese, whatevers out there. I wanted again, this is real simple. Theotwo the under heading to todays oped piece that the journal kindly published by brian and me,return to jfk case rising tide model , kennedy and reagan both scored growth through bipartisan tax cuts and that is just what is needed now. If you take away anything, and you may disagree with me and i appreciate and love disagreements, ive been in the disagreement business for a long time in tv and radio so im glad its going to be a q a. Im used to that too as long as its civil. The essence of this book is that first john f. Kennedy, 20 years later ronaldreagan , both of their lower marginal tax rates as well as a sound dollar to revise moribund economies and this is not something from the 18th century, its not something from the 15th century, this is something from recent times in the 20th century and our argument is that we have experienced a long dry spell the last 15 years, frankly under republican and democrats, president s and congress of poor Economic Growth, very poor drug. Thats one of the points we make. You can draw whatever conclusions you want to draw but i intend here not to write a politicized book, i dont really mention the current election but to just raise history. We can learn a lot from history and one of the great things about history is when you forget history, you forget that john f. Kennedy who i would argue is the greatest democratic politician in the last 50 or 60 years, i speak myself as a former democrat in my long dark past. John f. Kennedy was in fact the first supply cider. First supply cider. He was the pioneer. It went all the way back to the 1920s, that was a long time ago but kennedy was responding to very poor Economic Growth during the eisenhower years and there were three recessions and kennedy felt having one by a cats whisker in 1960 that if he didnt produce growth, in fact he talked about five times growth during the campaign that he would lose in 1964 so he was looking around for things that would get the economy out of the doldrums. There were three recessions during the eisenhower years and the Unemployment Rate was gradually increasing, up seven percent so i will just read you a couple excerpts from this book and i hope you get a flavor for what we are talking about. Fortunately we have a model to follow as we seek to return our nation to Economic Growth. It is the john f. Kennedy Ronald Reagan model. Its the model of getting the government restrain and modest into areas of Economic Policy. Fiscal and Monetary Policy. Both kennedy and reagan identified substantially cutting in income tax rates, getting the dollar raw strong and stable as the specific policy that would let the private sector which is to say the real economy thrive. We need that. We need that. Most of us are well aware that reagan was a tax cutter. Hes the guy that had to deal with the horrible inflation of the 70s and 80s which came to end in the first years of his presidency. Some of us are aware and correctly that bill clinton through some of that model fostered prosperity in the decade after Ronald Reagan with a Republican Congress in which he cut Capital Gains tax rates and was a proponent of free trade which would make him part of the mix. However, what is generally not known, at least not remembered but the subject of this book is about is that president john f. Kennedy in the early 60s not only used but largely pioneered the exact same model. Kennedy. He came to office during a period in which there was only a better than days, his own presidency launched the us on one of the greatest and longest economic booms in our nations history. These are the tax rates and a strong dollar, there was by the way five percent Economic Growth for a year between 1962 and when it ran out of gas and policies changed in 1969. If americans had noted this history, they probably would have tried the jfk reagan policy mix years ago during the slow growth 2000. We would have kept tax rates low, contained a strong dollar, traded stagnation for expansion just as we did in the 20th century and yet this history has been obscured. Todays liberals and progressives act the tax rate and a meaningful dollar are shockingly part far right policies. They were never put in practice in the 1960s and failed in the 80s and could only work in adream world but it was democrat kennedy who launched those policies. That by itself i think is the great factoid from this book. Let me read you just a couple quotes. We were recording along radio interview with my pallets running tonight at 11 00 and he found the tape with kennedys boston accent, a great famous piece kennedy made in december 1962, very famous speech which really was the breakthrough of his new policies. In short, it is the paradox of the truth that tax rates are too high today and tax revenues to low and the soundest way to raise revenues in the long run is to cut rates now. The reason is that only full employment can balance the budget. Tax can save the way to that employment. The purpose of cutting taxes now is not to incur a budget deficit but to achieve a more prosperousexpanding economy which can bring a budget surplus. That was jfk in 1962. December. Now, let me turn the clock forward. Ronald reagan comes into office. I gratefully served as one of his budget deputies a long time ago. On february 18, 1981, a month into his presidency, reagan gave a speech to the nation. He announced he was seeking the 10 1010 tax rate cut, 30 percent of across the board. Kennedys was roughly the same, 30 percent across the board so we skip over two decades. Heres reagan. Back when Calvin Coolidge cut taxes across the board, the governors taxes increased. When jack kenny he did it, his economic advisers were telling him the government would lose revenue and the government would gain revenue. Its a reality. They make quite a financial error. Jack kennedys line about it was quote, a rising tide lifts all boats area and this is what we believe the tax proposals we have made our aimed at. That was reagan in almost the identical words of john f. Kennedy and finally, last quote from reagan. Can you cut taxes and fight inflation by so doing this . I very much believe you can. Let me read you something. Our true choice is not tax reduction on the one hand and the avoidance of large budget deficits on the other. An economy stifled by restrictive tax rates will never produce enough revenue to balance the budget. Just as it will never produce enough jobs or even enough profits. Thats reagan quoting. John f. Kennedy said that back in 1962 when he was asking for a tax decrease. A cut tax rates across the board and he was proven right. That is reagan and before that is kennedy and i just want to say this for the umpteenth time, kennedy the democrat and as the under heading in this mornings paper for us, kennedy and reagan both spurred growth through bipartisan tax cuts. Thats just what we need now. [applause] so its become something of a career among our critics to claim reagan, to blame me, to blame michael laffer, jack kemp, to blame a whole lot of people who contributed to this story. Im fine with that, go out and blame. Im a big boy, i can take it. But for heaven sake, get the facts right. If you want to blame, blame john f. Kennedy. He started it in great fashion. And unfortunately he was tragically assassinated but reagan borrowed it, it succeeded in place and all i want to say is we have an election here and this book is not about the election but whoever, somebody needs to form abipartisan coalition , reach across the aisle as kennedy did and reagan did. Kennedys top Economic Advisor was a republican treasury secretary doug dylan. I think we need to do the same thing and thats all i ask. Stop yelling, stop persecuting, stop snarking, not being mean. Just look at the facts and read some history and you can see, there it is, a way out that what america unfortunately finds itself and im going to turn it over to my pal brian domitrovic. [applause] larry and i had a great time writing this book. A lot of it right here in new york city across thestreet. And a lot of events in this book happen in this neighborhood, i just walked up to Jacqueline Kennedy at the reservoir. Jfk said the crash pad is down the street, the carlyle hotel. Thats where he got one of the pebbles of his economic report that we discussed including a report that said dont you dare cut tax rates ever. He turned his back on and of course the Economic Club of new york is down in the canyon not far from here. One of the things we wanted to do in this book was trying to correct by means of evidence the impression that the tax cut of 1964 was keynesian, that kennedy was some kind of demand side from timer and not a supply cider. We understand that given that his tax cut was marginal tax rate but which means its not a dickensian tax cut, were not sure why that argument had traction so we wanted to identify the really Important Role that douglas dylan is treasury secretary played in 1962, three and four and what id like to do is review a president ial memo from the treasury secretary. Usually these things are dry as studs but in the context of what were talking about, when kennedy actually turned on his keynesian advisors, this memo turns out to be really important. Kennedy listen to this advice from his advisers, paul samuelson, jim tobin saying you got increase spending, get off the Gold Standard. If youre going to have that only temporary tax cuts because were going have to preserve the current structure for programs in the future, you got to do that. In 1962 every forecaster is fingers going to be another recession area dillon writes this memo to john f. Kennedy. He taught told him about the advice he was getting in europe. Paul believes, dylan wrote that any significant adaptation of government policy aimed at stimulating economic expansion should be presented in a clearcut, simple package but with consensus on these points. One, if there needs to be a tax cut it should be oriented toward improved disincentives. It should be of a permanent and reformed character. Reduction centered on lower bracket personal incomes would be regarded as fiscally loose bread and circuses. Although companion action in this center would be understandable. Two, the deficit should be presented as the response of tax reform. Type overall ceilings on expenditures should be announced. It is important that debts be financed out of current savings as opposed to Federal Reserve looseness. Three, the government should declare its willingness to allow Interest Rates to rise if combined demands from the private sector and large government deficits right through. And kennedy took every point in that advice. He said im not going to do the spending, going to stop the monetary looseness and i cut tax rates and the rates that matter, the rates that have incentives, especially the highest rate and thats going to draw capital back to this country, bring bigtime growth and save the Gold Standard because of the demand for thedollar. I might read one more passage. A lot of people asked this afternoon why was kennedys policy in the 1960s, why was it forsaken . Why wasnt it a policy all the way through the 1980s . Why did Ronald Reagan have to resurrect it mark whited stagnated inflation in the 1970s . One of the reasons we did have stagflation in the 1970s is that john f. Kennedys opponent in the 1960s election became president in 1969 and nixon dubiously made sure he didnt do john f. Kennedy policy so your first policy, going off the Gold Standard and raising the Capital Gains tax rates and goes this regulation and spending so heres an interpretive passage that we write about the 1960s and 70s, the assassination we right of november 1963 provided an enormous shortterm boost to tax cuts passed in 1964. It was fatal to it in the long term. The assassination was so shocking that the opponents of kennedys legislative agenda had to submit on at least one path kennedy goal out of due respect for the leader, the obvious choice was the tax cut. Once that was enacted all leverage was lost on blocking civil rights, kennedys other big initiative. In the long term however, kennedy passed in 1963 deprived the tax cut of its principal exponent articulator and enforcer. The cerebral tone that kennedy brought to the question of the tax cut , you heard about it in the new york speech, kennedys commitment to thinking through the real economic effects of the tax cuts while unencumbered from intellectual paradigms at the university of economics, the supreme social standing he had in common with Douglas Dillon and dillon alone and the native that he possessed constance assault Economic Growth problem of the day that constituted the credibility behind the administrations of commitment and seeing the tax cut through. But kennedy gone, the mechanism of the tax cuts and the motive for strong was gone too. No matter the phenomenal quality of the prosperity it could unleash. So harsh words. In other words, it didnt take johnson long to undo the policy he was associated with. And for a lot of Different Reasons relating to the war and politics and whatnot, he raised tax rate both at the individual rate from 70 back to 78 percent and then began to unhinge the dollar and as i said, this is a bipartisan, nonpartisan book so the next president Richard Nixon who ive met many times and his family are dear friends of mine but as nixon once said to me when he was in the office in downtown, you dont think much of my economic policies, do you . I said no sir, i really dont so nixon raised taxes and nixon unleashed the dollar, unhooked it from any other monetary discipline and impose a massive regulation on the economy including wage so again, in a bipartisan way the democrats and republicans got it right and democrat and republican got it wrong and now the question is how is the balance going to wind up getting . I cant answer that, my crystal ball is no better than yours and its important and the other point that brian read which i love is doug dillon, a very wealthy anchor, dylan read which for many years and did investment banks, dillon had just about as much money as joe kennedy and john f. Kennedy and traveled in very high social circles area in fact, even higher than the kennedys and kennedy did not stared him down, he had to listen dillon spoke. Kennedy went to his office as treasury secretary the wound up pretty good. Sometimes you got to be able to make people listen to you whatever it takes. In this case it was money and social standing. Me, i take it any way i can get it and good policy is good policy but themain point here again , this is not a partisan book. I just want america to coin a phrase to get moving again. Weve got to turn less than two percent growth over a couple decades now back to 3 to 4 percent growth which is what we do historically and to get there were going to have to take strong remedial actions, particularly on business tax cuts to grow the economy as five or six percent for several years in order to get us back on track. Kennedy and reagan showed that it can be done. Now since i love america and believe in democracy i believe we can get it done, we will see. Thats reallyour story. Im happy to take your questions. Happy to take your questions, even your criticism. Yes sir. Thank you. And ive never before associated kennedy with Economic Policy. [laughter] i was recently listening to an interview with aei scholar nicholas staff that the book had about the volume of people participating in the workforce, particularly men working age who are not even looking for jobs out of the labor force. Im wondering if this development that you argue is significant, whether that would in any way limit the effectiveness of a new policy of going to another round of these tax cuts. Or would it go the other way. As he argues in his piece, there are probably two key issues here. One is a lack of Economic Growth. We create jobs, it will grow. You want to lower budget deficits, grow. Want to help solve poverty, grow. There are other issues that nick raised, federal policy regarding more entitlement, other regulations and a disincentive to work and thats too bad because we want to get everybodys able bodies to work and i saw the same argument today, brand art with the Federal Reserve made a similar argument how well the Participation Rate is in the backbone of the economy which is t