December 1, 1988
Thank you all very much, George, Barbara, Bill Bennett. Thank you, Jack, for that wonderful introduction. I especially want to thank four very special and talented friends -- Bill Buckley, Cap Weinberger, Jim Baker, and Lew Lehrman, who will be heard later -- for those kind remarks.
So far, tonight has been a lot of fun. I feel like I've walked into my own episode of ``This Is Your Life.'' [Laughter] But that's just the way it feels being among dear friends. Tonight I see a lot of people -- and we have all seen them. We've fought alongside each other for many years. And I'm just glad you were able to stop fighting long enough for us to have this dinner. [Laughter]
But really, our strength has come from our remarkable unity. Whether the issue has been cutting tax rates, expanding world trade, defending the West, supporting freedom fighters around the world, or building a defense against nuclear weapons, we have stood tall, and we have stood together for America. And as Bill and Cap and Jim and Jack have said so well, our band of revolutionaries who came to Washington to do battle have every right to declare victory. I don't say this because I think our work is complete or the struggle is over; it's not. But it's time for us to recognize the power of our ideas, the force of our vision, and the magnitude of our accomplishments. So, if I were to offer a toast of my own, it would be this: From economics to foreign policy to defense, what we believe and have fought for for so long has now been tried -- and, yes, it works.
I feel confident that the work we've begun will be carried even further, to new heights, by a man I know well: George Bush, the next President of the United States. In fact, I want to salute George for how far he has already helped us come these last 8 years. We've been partners in a revolution, and I know that I speak for everyone here tonight when I assure him that all he need do is sound the trumpet and the great army of idealists and activists that we've counted on will be ready to charge.
One of the sponsors of tonight's dinner, the Heritage Foundation, with its president, Ed Feulner, has been a vital force in what we've accomplished. The Heritage Foundation 8 years ago set out what it termed a ``Mandate for Leadership,'' which came as a warning shot, telling the liberal establishment that a new sheriff and new deputies had ridden into town and they could not expect to carry on business as usual. Well, tonight I think the liberal pundits can read our lips: That mandate has been renewed.
One of the deputies -- a man who, when the clock struck high noon, was always at my side -- is leaving office this year. He helped to settle a tough frontier, the Congress, loading his six-gun with solid gold bullets. But above all, Jack Kemp is a man of ideas. And I think, really, it's those ideas that brought most of you here tonight, and it's on that basis that we should praise him. Certainly he's held high office; and, yes, from the gridiron to the political field of battle, Jack is a man of action and a man of courage. But the largeness of this quarterback is his sweeping vision of human freedom, profound in its depth, majestic in its reach.
Yes, I will speak tonight particularly of supply-side economics. However, let me say first that our vision does not begin or end with tax rates, for we conservatives are not materialists or economic determinists. Our vision is grounded in the most fundamental truth of all: that the God that created man and woman in His own image created us to be free. And this is true, as Jack often says, not for one people but for all people, and not for one time but for all time.
Now, when we think of those things that could be described as God-given, I don't think anyone -- at least not anyone here tonight -- would suggest that we include something the Keynesians called aggregate demand management. I believe we really can, however, say that God did give mankind virtually unlimited gifts to invent, produce, and create. And for that reason alone, it would be wrong for governments to devise a tax structure or economic system that suppresses and denies those gifts.
Incentive economics works because it places the individual at the center of the economy and unleashes the full human power of invention, production and, yes, compassion and generosity. It recognizes the creativity that is lodged in each person, the power of will and the act of faith that launches even great enterprises. As George Gilder wrote in ``Wealth and Poverty'': ``Our greatest and only resource is the miracle of human creativity in a relation of openness to the divine.'' Well, isn't that really the context in which to discuss economics?
You know, I've often quoted a philosopher and historian, ibn-Khaldun, who observed that at the beginning of the empire the tax rates are low and the revenues high, but at the end of an empire the rates are high and the revenues low. Now, he had a bit of a jump on me. He wrote in the 14th century -- which doesn't make us contemporaries. [Laughter] But in a speech I gave 27 years ago, I pointed out that the top Federal income tax brackets, which at that time ran from 50 percent up to more than 90 percent, brought the Government very little revenue. I said that ``the Government can only justify these brackets on a punitive basis.'' In the early 1960's and before, when I called for cutting taxes, for replacing progressive marginal rates with a flat tax, it couldn't be called supply-side economics because that name had not been coined yet. But our critics were not at a loss for words. They had all sorts of names for ideas, most of which I'd better not repeat.
Back in the 1970's in Washington, our ideas were relegated to the fringe. Prevailing economic wisdom took it as a given that the Federal Government could manage the economy to success, while the conservative vision of government and political economy barely had a foothold in Washington. And then Jack Kemp came on the field. Working with a small group of maverick economic thinkers, Jack began to read economic history and arcane studies of tax and monetary policy. He learned of the effect of the tax cuts under Presidents Coolidge and Kennedy, and he listened to the working people of his congressional district in northern New York.
So, while the beltway crowd despaired of ever reforming the Tax Code, even as my predecessor in the White House called it a ``disgrace to the human race,'' there were, nonetheless, a visionary few who were undaunted. In 1977 Jack put forward the Kemp-Roth bill to cut personal income tax rates 30 percent across the board. Still the reigning orthodoxy held firm to its prescription of high taxes and easy money, even as the stagflation soared. But other thinkers replied that the solution was just the opposite: low taxes and stable money. And after our administration took office and we implemented those policies, the result was just as promised: high rates of economic growth and low inflation.
And these ideas were just as politically powerful as they were economically effective. We saw that the future of our party depended on it being the party of working people, of opportunity, of prosperity and freedom. We couldn't hope to succeed so long as we acted as the liberals' tax collector, putting the squeeze on workers to fund our opposition's big government plans and redistributionist schemes. Nor should we try to ``me, too'' our opponents' efforts to buy constituencies with Federal programs. We knew that the future of the Republican Party at the national level did not lie in running a light beer campaign, offering people everything our opponents did, but less. [Laughter]
No, it lay in offering the American people more -- more jobs, more income, more opportunity, and more freedom. It was much more than our opponents could conceive of and far more than they could hope to match, because our opponents could only offer the people things that they had taken from them while we could offer the American people far more than they ever had: the full fruits of their own abundant creativity.
And that, as I said, is a promise that we've kept. Today America is experiencing record prosperity. Our people have created 18\1/2\ million new jobs and almost 5 million new business incorporations. The unemployment rate is at its lowest level in 14 years; more Americans are working today than ever before. Real family income has hit an all-time high. And we're in the longest peacetime expansion ever recorded: 71 months of growth.
A recent article in the Public Interest by Paul Craig Roberts compares this expansion with the longest previous one, and the contrast is striking. Not only is our expansion over a year longer, but just looking at the same length of time, the first 58 months, we held inflation down to a third of what it was in the previous expansion while we reduced the unemployment rate by almost twice as much.
And since our expansion began, we've seen manufacturing productivity grow at its highest level in the postwar period, double the rate of the 1970's. The truth is that for 6 years now the economy has been so good that occasionally they even had to announce it on the evening news. [Laughter] The story would be something like: ``With the economy booming, can depression be far behind?'' [Laughter]
Well, we've helped prove that economic truth is a lever that can move governments, move history, and truly change the world. But I'm still waiting to see if it can make the nightly news. [Laughter] But whether it does or not, it's made history -- and not just in our own country but around the globe.
What we've done here in America, the economic model that we have created, truly has become what Jude Wanninski described as ``The Way the World Works.'' All the major industrialized nations either have or are in the process of cutting tax rates. Privatization is sweeping the Third World. Developing countries no longer look to the state for growth, but instead to private industry and international trade. Even the Communist countries are reforming their system to permit more economic freedom. And for Jack and his new Institute of Free Enterprise Development, the greatest world market is the market for ideas, from the Laffer Curve to money that's as good as gold. He sees a planet hungry for a vision that can bring freedom and prosperity to every nation on Earth.
In places like the Republic of Korea, Taiwan, and Chile, we see how economic freedom yields more than increasing prosperity: it also nourishes a powerful popular force for greater political freedom and democracy. And our revolutionary vision of democracy also means supporting the freedom fighters who take up arms against brutal Communist dictatorships; and this we have proudly done in Asia, Africa, and Central America. America must always be a champion of freedom and a friend to those oppressed.
And we must continue to pursue our Strategic Defense Initiative that would free the people of the world from nuclear terror, as Jack just told you. We believe that America must be defended and that the free men and free minds of the free world can create the technology to do just that.
I can say to you that on every important issue Jack has been a leader. And he has stayed loyal to principle and party. And this year, when Jack saw that this was meant to be George Bush's time, from that point on, no one worked harder or with greater enthusiasm to help assure that George Bush became the next President of the United States. And that is something Jack can be proud of and for which we can all be grateful, for it is compelling testimony to the caliber of both men.
When you talk about Jack Kemp one word comes to mind: the cause. Wherever he is, he'll fight for that cause; he'll work for that cause. And what unites every single soul in this room is our shared commitment to that cause. Jack Kemp has already fought and won more battles than most men dream of. But I also remember that on the last Saturday before the election Jack and I were out campaigning for George Bush, and we met up in Macomb County, Michigan. It was a cold and rainy morning. But once we were inside the hall, Jack spoke to the crowd first, and he fired them up. I heard that audience respond to him, and what they told me was that Jack Kemp's future is even greater than what's already passed. His greatest game has not yet been played. His longest touchdown pass has not yet been thrown.
Jack is fond of saying that this administration gave America back its future. Well, if I can return the compliment, Jack, I would just like to say that your ideas helped fuel us to go further into the future than we ever dreamed possible. So, to you and to Joanne and your wonderful family that is so much a reflection of your love and spirit, you have our gratitude.
And come January, when I saddle up and ride off into the sunset -- [laughter] -- it will be with the knowledge that we've done great things. We kept faith with a promise as old as this land we love and as big as the sky, a brilliant vision of America as a shining city on a hill. Thanks to all of you, and with God's help, America's greatest chapter is still to be written, for the best is yet to come.
Thank you all, and God bless you all.
Note: The President spoke at 7:50 p.m. in the Regency Ballroom at the Omni Shoreham Hotel. In his remarks, he referred to George and Barbara Bush; William J. Bennett, former Secretary of Education; William F. Buckley, Jr., editor of the National Review; Caspar W. Weinberger, former Secretary of Defense; James A. Baker III, Secretary of State-designate; Lew Lehrman, New York Republican activist; and Joanne Kemp, Representative Kemp's wife.