By ALAN HALL
© 2025 New Mexico News Service

Allow me to introduce myself. I am an arrogant man. It is a particular type of arrogance; the arrogance of Margaret Thatcher, who famously scorned economic ideas that were contrary to her real-life experience. Now, unlike Dame Thatcher, I was not raised in an apartment over the family grocery. But I was raised in an apartment over the family motel and gift shop, and like Thatcher, I was immersed in the business from earliest memory. That puts me firmly in her camp.

One thing that I learned as a child was the overriding importance of “business”. Whenever one of my parents returned from an absence of even as little as three or four hours, almost their first utterance was “How’s business?” Business, in this context, meant sales. It wasn’t that other aspects of the enterprise weren’t important, but sales were recognized as the driver.

If a genie had appeared and offered my parents the choice in the coming year between an increase in sales of 10% and a decrease in expenses of 20%, my parents would have chosen the increase in sales without hesitation. Why? Because supply does not ensure demand, and without demand, supply is meaningless. But demand, somehow, does generate supply. If there is demand, then supply inevitably follows, like a tractor pulling a trailer. In addition, my parents keenly understood that business begets business. An increase in customers is the best possible type of advertising.  Supply, on the other hand, does not beget supply.

I don’t recall exactly when I first heard about supply-side economics, but my upbringing allowed me to instantly recognize it as a fraud intended to justify tax cuts for the rich.  Unfortunately, much of the American business community has drunk the supply-side Kool-Aid. This has had disastrous effects.

First, whenever there is some economic upset, like the Dot-Com Bubble of 2001 or the housing fiasco of 2008, a piteous wailing goes up for tax breaks and subsidies. But businesses in those circumstances don’t need tax breaks and subsidies; they need business. And the way to generate that business is not by giving the rich huge amounts of money that they will simply sit on while contemplating investments to be made after the economy normalizes. Rather, it is by giving the stimulus to lower-income people who are certain to spend it pronto. It does not matter whether they spend it on groceries, car repairs, or rent. The important thing is to get that demand into the economy without delay.

Second, the crass notion that tax reductions are all good has fostered an unprecedented increase in deficit spending and the national debt. Little need be said about this, except that if the situation is not turned around, and soon, it will end in tears. We don’t need tax reductions; we need substantial tax increases. For those who shrink from such a horror, it is worthwhile to recall the year 2000, when tax rates were higher, the economy was ticking along nicely, and we were well on track to eliminating the national debt.

Finally, the prospect of plundering the federal government on an unprecedented scale has excited the avarice of our home-grown oligarchs, whose unlimited campaign contributions, enfeebled character and enthusiastic hooting have supported the election of a man who stubbornly insists that autarky (self-sufficiency) will bring prosperity.

Such are the wages of the tax cut monomania. Thatcher would spit.

Editor’s note: Alan Hall retired after practicing business law in New Mexico for 30 years.