SYNOPSIS: Supply-Siders and Conservative Politicians can't leave well enough alone

In the opening scene of "Washingtoon," Mark Alan Stamaty's classic Reagan-era political comic strip, an insomniac plutocrat is impressed by a late-night infomercial host. "Anyone who can sell glow-in-the-dark coat hangers to me could probably sell supply-side economics to America," he declares. And thus, with guidance from the nation's leading charismatician, begins the career of Congressman Bob Forehead.

The strong performance by Steve Forbes in the Iowa caucuses shows that a good charismatician, with a hefty budget, can do well even with unpromising raw material. But why does the wealthy publisher feel the need to be his own Bob Forehead? Is he just a capitalist fool?

Many commentators have speculated about the candidate's personal motivations. And of course, rich men in general are made more likely to run for office by campaign finance laws that allow an individual of means to lavish hard money on his own campaign but not on someone else's. But the reason this restriction matters so much is that Mr. Forbes is all alone, forced to finance a supply-side campaign single-handed -- because the rest of his party isn't interested. After all, who needs another crusade when you've already won?

Consider, if you will, how America at the end of the Rubin-Summers administration compares with America at the end of the previous Democratic presidency. In 1980 the wealthiest taxpayers faced a marginal tax rate of 70 percent -- that is, they got to keep only 30 cents of each extra dollar they earned. Now they get to keep more than 60 cents. In 1980 conservative social critics warned that excessively generous welfare was sustaining a culture of poverty; in the 90's Bill Clinton ended welfare as we knew it. In the late 70's powerful unions extracted huge wage increases in industries like autos and steel; today only one private-sector worker in ten is unionized, and the unions that remain are shadows of their former selves.

And even more important than these changes in policy is the changing shape of the economy itself. In 1980 conservative critics used to complain that enterprise was not being rewarded, that stock prices had declined in real terms, that America was becoming a society in which it just wasn't worth trying to get rich. Twenty years later, after a decade that makes the 1920's seem merely meowing by comparison, it is hard to see what more the rich could ask for.

So why can't people like Steve Forbes simply declare victory and go home? The well-off would, of course, like to see even lower taxes -- which George W. Bush, his life made easy by the revenues a booming economy generates, promises to deliver. (Is he sincere, or is he just doing this because that is what Republicans are supposed to do? Who knows?) But there is one important thing that the supply-side movement has not gotten, and still desperately wants: intellectual vindication.

Put it this way: Mr. Bush's economic advisers, at least the ones whose names have appeared in the press, are -- it pains me to say this -- reasonable men. Translated, that means they have a view about the way the world works that differs in some important details but not in broad outlines from the view held by a mainstream economist like me -- or, for that matter, Larry Summers. And that reasonableness is what drives Mr. Forbes up the wall.

For Mr. Forbes is, intellectually at least, the true heir of the Reagan revolution -- a revolution that was supposed to sweep the ideas of all those establishment types from Wall Street and Harvard into the dustbin of history.

The true believers didn't want a scaled-back welfare state, they wanted a repudiation of the whole idea of a social safety net. They didn't want economic policy that worried less about Keynesian demand management and more about incentives, they wanted an official declaration that Keynesian economics was a fraud. Call it idealism, call it vanity -- the supply-side cause has always contained more than its share of frustrated academics (Newt Gingrich, Dick Armey) -- but the movement Mr. Forbes represents wants nothing less than unconditional victory.

The Republican establishment, however, isn't interested. It has gotten what it wanted; now it's mainly a matter of protecting its gains. And it doesn't need Bob Forehead, because it's got George Bush.

Or maybe it's the same thing.

Originally published in The New York Times, 1.26.00