Ronnie and Nancy_ Their Path to the White House - Bob Colacello [293]
Several months earlier, UPI had reported:
Betty Newling Bloomingdale, a wealthy person prominent in fashionable society, was fined $5,000, given a one-year suspended prison sentence and placed on a year’s probation . . . for not declaring the full value of two Christian Dior dresses she brought to the United States from France. Testimony showed the true value of the dresses was $3,880, but Mrs. Bloomingdale presented an invoice to a customs agent showing the purchase price as $518.65. The reduction was made to avoid the import duty. Mrs. Bloomingdale, who lives in Beverly Hills and whose husband is a member of the New York department store family, pleaded guilty last August 23 to a charge of concealing an invoice from a customs inspector. Federal District Court Judge Lawrence T. Lydick, who imposed the sentence, told the 4 7 0
Ronnie and Nancy: Their Path to the White House defendant that she “deserved the contempt of society which has served you so well.” Mrs. Bloomingdale told the court she was “truly sorry.”34
The close connection between the Reagans’ social and political lives during this period is perhaps best illustrated by Justin Dart’s promotion of Arthur Laffer, the brilliant young economist whose revolutionary “supply-side theory” would provide a major theme for Reagan’s 1980 campaign and greatly influence his economic policies as President. Laffer was one of a group of economists who had attended a December 1975 meeting with Reagan organized by Martin Anderson, a former Nixon aide who had been Reagan’s senior policy adviser on domestic issues for the 1976 campaign. It was at that meeting, Anderson recalled, that Reagan probably first heard the supply-side gospel as preached by the thirty-five-year-old Laffer: “If you cut tax rates, revenues may go up. If you raise tax rates too much, income goes down.”35 As Anderson pointed out, the work done by Laffer and Robert Mundell, his mentor at the University of Chicago, on the relationship between tax rates and incentives to invest and produce
“was way, way outside the mainstream of the current economic thinking.”36 Mundell would eventually win a Nobel Prize, and Laffer would become a near household name for the Laffer Curve, a simple, graphic illustration of their theory.
For Reagan, who had been railing against the graduated income tax since his days as a high-bracket Hollywood star, Laffer’s ideas had natural appeal.
It wasn’t until the following year, however, when Laffer left Chicago for the Charles B. Thornton chair of business economics at USC—and Dart, a USC trustee, “adopted” him—that he began to see Reagan frequently. “I got very involved with Reagan through Justin Dart,” the economist told me. “I was very impressed with Reagan. He knew his stuff, he talked about it, he’d come to meetings with congressional testimony paper-clipped where he had a question he wanted to ask.”37
A month after Laffer arrived in Los Angeles, in September 1976, Reagan wrote a column titled “Tax Cuts and Increased Revenue”: Warren Harding did it. John Kennedy did it. But Jimmy Carter and President Ford aren’t talking about it. That “it” that Harding and Kennedy had in common was to cut the income tax. In both cases, federal revenues went up instead of down . . . the presiden-Reagan vs. Carter: 1977–1980
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tial candidates would do us all a service if they would discuss the pros and cons of the concept. Since the idea worked under both Democratic and Republican administrations before, who’s to say it couldn’t work again?38
A person close to the Group told me Laffer